Value of payment protection never greater as redundancies rise

Escalating redundancies and further gloomy forecasts for Britain's economic outlook have underlined the case for workers taking out payment protection schemes, says standalone provider Paymentcare.co.uk.

As the British Chambers of Commerce predicted, unemployment could nudge past the 3.1 million mark – or around 10 per cent of the workforce - Paymentcare.co.uk said it had seen a surge in applications for PPI from across a range of sectors.

And, as Marks & Spencer, one of the UK’s biggest High Street employers, announces extensive redundancies across its nationwide store chain, Paymentcare.co.uk’s Shane Craig warned that the jobs market was unlikely to improve until at least 2010.

“A number of businesses will have held off from swinging the axe until after the Christmas period, but now we are likely to see a lot of blood letting over the next two quarters.

“That said, as lower interest rates begin to kick in we are likely to see improved activity in crucial sectors such as the housing and construction market as affordability levels become more attractive, banks begin to relax lending criteria and buyers slowly return.”

But Craig added that there was more hardship to be endured on the High Street and in the motoring industry, as well as tourism and leisure.

“Reduced consumer demand is inevitably going to mean lay offs. We have a significant over-supply of vehicles and a scarcity of buyers, and a wander down any High Street will reveal any number of shops which are effectively surplus to requirements,” he said.

“We are already beginning to hear of problems faced by hoteliers and associated firms working in the leisure and tourism sector: if people have less money in their pocket, they are not going to be in a rush to go out and spend it.”

Jaguar Land Rover this week confirmed it has axed 2,000 positions since the beginning of last year. The company, which employs 15,000 people, cut agency and contract workers to reduce its costs. Jaguar also shut down its factories for a month over Christmas.

Nor is the public sector insulated from the shadow of unemployment: Government sources have admitted that thousands of public sector workers will lose their jobs over the coming year, with approaching 10,000 jobs in the prison, probation and court services set to be cut as the Ministry of Justice looks to save £900 million.

“We have seen a substantial leap in the number of enquiries from workers wanting cover in the event of losing their job: they are coming in from all sectors, but the majority would now appear to be from those working in sectors like retail, motoring, leisure and financial services,” said Craig.