Financial problems impact job seeking behaviour

[Legal Beagles]

Research shows the low level of benefits paid to unemployed people gives rise to a wide range of problems that affect their ability to maintain a focus on, and pursue job seeking activities.
Reducing benefit levels has sometimes been justified on the grounds that this increases the incentive for people to find work. However, further reductions could be counter-productive as they would exacerbate the problems as identified in new research ‘Out of work, out of money’. In February, Inclusion and the Centre for Responsible Credit (CfRC) were jointly commissioned by Manchester City Council to determine how financial problems affect job seeking behavior and the ability of unemployed people to undertake job search/secure a job and sustain employment. The study identifies that money problems impact on job seeking behavior in four ways, by:

• Distracting people from job search;
• Constraining job search activity;
• Creating disincentives to work, and
• Reducing the chances of people sustaining their employment.

The report shows that more needs to be done to reduce the financial burdens on unemployed people and to join up debt advice, financial education, affordable credit, basic banking, and welfare to work services at the local level. Findings also show debt recovery policies and some insolvency procedures could affect job seeking behavior.
The report provides a detailed set of twelve recommendations to be taken forwards by national and local Government and its agencies, the financial services industry, including credit unions and community development financial institutions, welfare to work providers, and debt advice agencies.
View the full report for further information, ‘Out of work, out of money’.


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[Amethyst]

Re: Financial problems impact job seeking behaviour

Very good report, they should do it nationally, really shows the system just doesnt work nand once again shows that bank charges have a major impact on peoples lives.



Use of financial services

The focus groups were also used to seek information about the use of financial
services and how this had changed with the loss of employment. We found that:
• savings were used up quickly and accounts closed
• people often incurred bank charges, causing them to close their accounts and use
Post Office Card Accounts in their place
• people had problems maintaining insurance payments, including for home
contents.
The closure of bank accounts then affected the transition back to work as some of
the participants found it difficult to obtain another account for the receipt of wages,
and the absence of savings meant that it was difficult to cover additional work related
expenses pending receipt of first wages. Many participants had to borrow from family
and friends as a result but where this was not possible it caused real difficulties,
including benefit fraud in one case. These problems were exacerbated by delays in the
administration of benefit payments designed to help with the transition to work and
the low level of financial support available, and the experience often put people off
using agencies to find employment as this often meant a constant movement in and
out of work and financial disruption.