Unemployment rose by a record 281,000 to 2.38 million, in the three months to May, according to the Office for National Statistics. This is equivalent to 3,088 losing their jobs every working day for the past three months. The jobless rate which now stands at 7.6% is the highest in more than 10 years.

The number of people claiming unemployment benefit rose by 23,800 in June, to 1.56 million, which is less than what was expected by analysts.

The younger generation has been particularly hard hit with unemployment for those under 24 years of age increasing to a 16 year high of 726,000.

There has also been an increase of 46,000 for those who have been out of work for more than a year who now number 528,000, the highest for 11 years.

Debtwizard comment

With many analysts predicting that 3 million people are expected to be unemployed by the end of the year then it will not be surprising to see more of these monthly figures of around 90,000 losing their job.

Many will eventually find new jobs but they will not match or improve on their previous salaries and as a result thousands will free-fall into debt, some will end up bankrupt or propose an Individual Voluntary Arrangement, IVA.

There will also be others who will not be able to pay their mortgages and who will eventually lose their home. The high unemployment figures will have an impact on the both the insolvency and house repossession figures.

There is also real concern about how these individuals will motivate themselves into getting back to work.

Unfortunately some will drop into depression or turn to alcohol, gambling or even crime in an attempt to solve their debt problems.

From experience many will not address their debt issues for well over a year from when they first arose and will often ignore the fact that they have a serious debt problem growing everyday.

Creditors also need to be more understanding and sympathetic towards borrowers who find themselves suddenly out of work and take note when someone is a ‘can’t payer’ instead of a ‘won’t payer’.

Debt can consume your life. These people need support from their families, friends and creditors both emotionally and financially. They also need to have clear goals on how they can manage their debts. The best way to start is to draw up a budget form, prioritise which creditors need to be paid first such as mortgage and rent, followed by utilities.

It is a clear fact that once you get control of your debts you get back control of your life.