Aftereffects of unemployment and ways to deal with them financially

Unemployment impacts everyone, whether you opt out of regular employment or get laid off. Such individuals struggle to meet even basic requirements. It could be anything like rent, food, a child’s school fees and educational requirements. Moreover, you may struggle to catch up on new skills required due to inflexible finances.

Thus, learning how unemployment impacts your lifestyle may help you manage it better. The blog illustrates the after-effects of unemployment and solutions.

Consequences of Unemployment and possible solutions

Unemployed individuals are susceptible to experiencing many challenges. These exacerbate suffering and impact one physically and mentally.  Here are some consequences of unemployment and the best ways to deal with them:

1) Increasing health concerns

 Individuals’ victims of furloughs and mass job and business loss often struggle with too many health issues. Existing conditions fumes stress and lead to health concerns like- heart disease, increased blood pressure, depression, insomnia and constant headaches. To counter these, one requires medical consultations and medications.

However, meeting important liabilities like these becomes impossible without regular employment. It is because savings do not suffice the expenses that follow.

SOLUTION: Identify whether you have any ongoing health insurance policy. If you have been regular on insurance premiums, you can use it to attend to present health concerns. However, claiming insurance is a long process. If you need instant cash for medical assistance, check emergency loans for the unemployed in the UK marketplace. It may help you with time-sensitive medicines, treatment and health consultation. It is specifically ideal for individuals with unemployed benefits or part-time income.

2) Stopping mortgage payments

Owning a dream home is a lifestyle goal for unemployed individuals. Unfortunately, they must halt the dream of climbing the property ladder for some time. Additionally, the interest on the mortgage continues to rise regardless of the missed payments. Individuals with mortgages find it challenging to deal with the situation.  Their primary concern is-

“What if I lose my property due to non-repayment?”


Unemployment makes one shift to a smaller apartment that’s affordable. In that case, meeting mortgage payments stands simply impossible. To manage it the right way, you can take any of the below steps:

  • Extend your mortgage term to afford the repayments
  • Seek payment holiday for 6 months (interest will be added)
  • Check Support for Mortgage Interest (SMI) Scheme

With the SMI scheme, the government makes payment on the first £200,000 on the outstanding mortgage until you cannot pay. You may qualify for this only if leveraging:

  • Jobseeker’s Allowance
  • Employment and Support allowance
  • Income support
  • Universal Credit
  • Pension credit

The government usually pays directly to the mortgage lender. It lowers your mortgage debt significantly. For pensioners, the government do not provide much help with the mortgage. Moreover, the payments the government make on your behalf work as a loan. You must pay it back after selling or owning the home.

If you do not find it apt, the other 2 points may definitely help you.

3) Pending rental dues

It is one of the most dreadful parts of unemployment. Pending rentals implies inviting the landlord’s scorn. Consequently, he may ask the tenant to seek another rental place. It is no less than havoc for the unemployed person.

The landlord may understand if you have been regular on the rent before unemployment. Alternatively, if you were inconsistent, unemployment may be bad news for the landlord, and he may act.

What to do?

SOLUTION: Analyse how much you can pay from the existing finances. It may seem difficult to budget, but you must. You should save some for something important like rent. Talk it out with your landlord and pay what you can. Request them to grant extra time to pay the dues. Moreover, analyse whether he could waive some amount. It would help you clear dues.

If you cannot, claim Housing Benefit. It is a facility to pay the rent if unemployed with low income and claiming benefits. However, you can only get it on the below conditions:

  • You are in the state pension age
  • You reside in a temporary housing faculty

Individuals with savings exceeding £16000 may not qualify for the same.

4) Dealing with business loss as a self-employed

Unemployment is not just about losing regular income but even a business setback. Some encounter a whopping business loss, leading to a shutdown. It is heartbreaking and impacts the payment cycle. You may find it difficult to deal with the suppliers, the employees and the machinery. If you clear the dues, you generally end up having limited savings.

In this case, reviving business from loss is challenging. Due to this, self-employed or new entrepreneurs search for part-time or full-time job opportunities. It helps them create a cash corpus to restart the business on a good note. However, starting a business from scratch requires time.

SOLUTION:  You need to get employment immediately. Finding a job within existing circumstances gets challenging. It is because you lack the required experience in a company. In this case, you can turn to multiple part-time job options. You can spot many for your needs. It would help you improve your financial condition and manage business requirements.

However, sometimes, the business needs require more cash flexibility. Individuals with low income and credit scores struggle to get needed assistance.

Some lenders provide needful financial help to new entrepreneurs and self-employed despite poor credit history. For more flexibility, a 5000-pound loan for a bad credit score may help. No, you do not need to reveal any recent revenue stats, instead, you can get one by presenting a business plan and mode to pay the loan back. It could be anything from a minimal invoice proof of the recent project or any part-time income you have.

You can use it by prioritising the business expenses. Analyse the most important business initiative and finance that first. It would help you restart the business at a strong pace.

Bottom line

So, you must have at least one of these issues as an unemployed. At times, it becomes challenging to deal with unemployment and its multiple aspects without a plan. And of course, unemployment hits unplanned. Thus, you must work on the next best move instead of regretting the loss. The blog states some of the best strategies to re-dominate the important financial life aspects. You need to know the options to manage the situation better. Good luck!

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