Sunday, March 22, 2009

UK Jobseekers allowance - is it enough to get by in London?

As unemployment in the UK hits the 2 million mark, the number of people seeking Jobseekers allowance is on the rise. For those who are eligible for the allowance, the allowance for those aged over 25 is £60.50 per week.

unemployment+london

Following my previous post of London trainee lawyers getting a payout of £10k to take a year off, some commentators indicated the sum is hardly enough for the relatively high living expenses in London. Granted that the Jobseekers allowance is to help you along and is never meant to be an income stream, let's take a look at how far this weekly payment can stretch assuming you were to stay put in London.

Housing

Despite the economic downturn and the deluge of rental properties flooding the market, the rental in London remains stubbornly high. A quick check on London Property Watch shows that average rental for a 1 bedroom property in London to hover around £200 - £300 at the time of writing.

With a mere £60.50 a week, you'll definitely not be staying Covent Garden and even Barnet for that matter - unless you are sharing the flat with nine other sorry souls. Looks like it's heading back to the parents' or moving out of London altogether.

Food

With London dropping from the 8th most expensive city in the world in 2008 to the 27th in 2009, one would expect it to be cheaper to fill one's stomach in the capital.

In view of the credit crunch, restaurants and eateries across London have rolled out a slew of promotion for those on a budget. £9.99 for a two course lunch deal, with a drink thrown in if the owner is desperate, is not hard to find these days. With the money left over from rent, the jobseeker could afford to eat out for a meal or two per week without busting the allowance.

Needless to say, cooking at home is definitely a cheaper option. In fact, you could survive on just one quid per day if it comes to that.

Transport

Unless you have decided to be a hermit and remained unemployed, you would probably want to step out of your pad every now and to start hunting for jobs. Being law abiding Londoners, fare dodging is out of the question. So how far can your money bring you? Well, it depends.

London's public transport system remains one of the main expensive in the world. A flat fare of £1 for all buses and £1.60 for Tube travel in Zone 1. It doesn't sound like much but it does add up and would eat through that weekly allowance before you know it.

Well, worse come to worse, you could always take a hike. That's good exercise too.

***

So it seems that the weekly Jobseekers allowance of £60.50 is just sufficient to tide you over these difficult times, at least till you find permanent emplyment. But getting your own pad in London is out of the question.

What's the unemployment allowance in your country, if there's one in the first place? Is it enough to get by?

Also...
Riding out London's recession
UK heading for recession, London shedding jobs

Share/Bookmark Pin It

london+in+a+weekend

8 comments:

LadyBanana said...

Don't forget though, unemployed people get housing benefit which can pay for almost all their rent and council tax.

It amazes me though how so many do seem to get by on it when they smoke and drink and still run a car.

I work and I really don't think I could afford that kind of lifestyle.

Martin In Bulgaria said...

If you have children are single parent and of a minority ethnic background and gay you've got it made financially if you are unemployed.

That aside there are two schools of thought the goeverment who think they know how much you need to live on and the unemployed who know that ti isn't. Politician should be made to live in a tower block on unemployment benefits for at least a year to find out how worng they are.

A also agree with LadyBanana smoking and drinking is expensive, but then it's probably the people who I refered to in the first sentence

RE Ausetkmt said...

wow.. that's about $500 us a month, and they can still get a housing allowance ontop of that ?

are you kidding ? they are having trouble living on that ? I must admit tht I've lived on less than that and still had to pay rent and buy food out of the amount I got.

these folks should look across the pond to our economy and then rethink their economic plans.

Hey CK !

Dutchie said...

Last time I mentioned that our unemployment benefits is 70% of the last earned income, u remarked that it was generous. However, this scheme is paid out of a compulsory insurance which is automatically deducted from every employee's pay cheque every month. Is it the same for the UK ?

We also hv to pay for indemnities against sickdays, disabilities, widow's/orphans pension n training(updating one's skills), co-op pension n early retirement premiums. This lot plus the income tax comes to 48% on our gross income.

On one hand it's good to be covered for any unforeseen mishaps but very often I wish we could hold on to more cash each month !

I like the housing benefits u hv there bec it's the biggest chunk of expenses one has to fork out, especially if it's a mortgage. Folks here gets that only if u live on welfare, which is really the minimum for survival.

242,00/mth is more than enough to pay for the little necessities in life for a single person but it wont cover our monthly fixed expenses which is easily 10x that amount !

SheR. said...

HEy CK!!
Thanks for updating us on the transport fares now. It's way cheaper than when we were in London. Good news for us popping by next month with a depreciating GBP against Kunas. :D

See you there mate. Let's fix a place that we can find you on SG day!

sixmats said...

I think the allowance should be only enough to tide you over. You're supposed to be looking for a job, not living the high life, no?

yoongz said...

Here in Switzerland people get 80% of last monthly income - given a few months to find work - then they step in & make you go for interviews & if in a year you are still unemployed, they make you take courses to make you more employable.
So i think it's a pretty clear message from the govt - "go get work!"
Oh & if you are offered a job from one of those interviews, you have to take it even if not ideal or you are off the dough.

Anonymous said...

I was a little puzzled by the inference by "Martin in Bulgaria" that gay or minority ethnic background people get extra monetary benefits in the UK - they most emphatically do not.
It is possible for a mother with no visible means of financial support to get social housing in advance of people without children, and although I accept that this encourages irresponsible women to get pregnant in order to get cheap housing, I still feel this is better than permitting children to live in slums or on the street, which is what would happen otherwise (we are talking about irresponsible people, remember).
Also, in the UK, you only get £60 per week contribution based jobseekers allowance (JSA) for 6 months if you have more than £16000 savings; after 6 months all benefits come to a grinding halt until you've used up all your savings, and then income based jobseekers allowance, housing benefit and the other stuff *may* kick in provided you fulfill frequently baffling criteria.
Excluding a mortgage or rental (which would most likely swallow up your entire unemployment benefit and then some), if you include food, water, electricity, gas, telephone, clothes, and perhaps a small allowance for transport, the minimum someone can live on in the UK *outside* London is about £100 per week - and this would be *very* frugal living. If you plan to go out occasionally or see relatives, or have broadband internet (required these days to find new jobs) and all the other little drains on our purses, then £200 per week is more likely.
The £60 pw JSA is very far from generous, and its sole purpose is to soften the inevitable crunch in unemployed people's living standards.
The people you see 'living the high life' on benefits are most likely doing cash-in-hand work without paying tax or declaring their work to the unemployment office.
- O h'Ingardail