Brexit: Workers Should Consider Unemployment Insurance Immediately

Given the economic uncertainly following the UK’s vote to leave the European Union, protection experts Drewberry Insurance is advising employees to put in place a financial plan to limit the financial impact of possible future redundancy

On Friday, after it was announced the leave campaign had won the referendum, credit ratings agency, Moody’s cut the UK’s sovereign credit rating to negative from stable, stating that the Brexit result heralded “a prolonged period of uncertainty for the UK, with negative implications for the country’s medium-term growth outlook” (1).

A natural solution to this risk would be Unemployment Income Protection Insurance (2), which could payout a monthly benefit for up to one year to cover essential household bills should the policyholder suffer forced redundancy.

It is vital that any workers wishing to gain this protection do so before any announcement of redundancies has been made at their company, or they may not be eligible to take out cover.

How real is the risk of redundancy post-Brexit?

Prior to the referendum, meeting notes on 16th June from the Bank of England’s Monetary Policy Committee stated:

“A vote to leave the EU could materially alter the outlook for output and inflation, and therefore the appropriate setting of monetary policy. Households could defer consumption and firms delay investment, lowering labour demand and causing unemployment to rise.” (3):

Since the referendum result, the Institute of Directors (IoD) has released the results of a survey of just over 1,000 of its business leader members, showing that 23% of those surveyed were putting a freeze on hiring and 5% would be making redundancies. In addition, 22% of members were now considering moving some of their operations outside the UK (4).