The Eurozone crisis does not look set to abate any time soon as new figures show that unemployment reached a new all time high of 17.56m. The figures do not look good for individuals or businesses and indicate that companies are preparing for the worst as they look for additional ways to cut their budgets. However, the picture in the UK is not quite as gloomy as it showed a drop in unemployment, down to 2.61m in the three months ending April.
With massive unemployment rates in countries like Spain, where approximately one quarter of all people are now unemployed, it is perhaps little surprise that the Eurozone is faring so badly. In total, 11.1% of people in Eurozone countries are now without work which signifies the lowest rate since records began back in 1995 and shows that the region is far from out of the crisis that has been threatening many countries.
The UK has performed a little better although a UK unemployment rate of 8.2% still indicates a large portion of the workforce currently out of work. What’s more, the number of people claiming Jobseeker’s Allowance has risen by 8,100 people and 1.6 million people claimed the benefit in May 2012.
Poor unemployment inevitably leads to a greater number of individuals and families that fall within the low income threshold. Such families will find it more difficult to meet regular payments and the government backed Social Fund scheme is designed to help such individuals and their families.
The Social Fund offers interest free crisis loans and budgeting loans that can be used to pay for things like household bills, new clothes, and other emergencies that would not otherwise be available. There are some criteria that need to be met for each of these types of loan but they provide a viable means of paying for essential items, for those families that are at highest risk. As unemployment remains at high levels, the number of people relying on budgeting loans and other Social Fund loans is likely to continue increasing.