Rising job insecurity highlights protection conversations for mortgage advisers
Concerns around job security across the UK are growing as signs of a weakening labour market continue to become more apparent. Job vacancies have fallen; redundancies have become more commonplace, and those out of work face tougher competition trying to secure new employment. As a result, many people are experiencing longer periods out of work.
This uncertainty has had a direct impact on the unemployment insurance market, which has seen demand for cover soar over the last year. Enquiries for unemployment cover more than doubled in 2025, rising by 105.5% between Q1 and Q4, according to data from Best Insurance, as a growing number of households seek ways to safeguard their finances should their income suddenly stop.
Claims have also risen as more people turn to unemployment cover during periods of redundancy, with the number of unemployment cover claims 180% higher at the end of Q3 2025 than at the start of year.
UPWARD TREND
Historically, spikes in demand for unemployment cover often point to broader shifts within the labour market. As economic and employment uncertainty continues to grow, workers tend to seek financial protection before the full impact of sector-specific redundancies begin to take hold.
The recent rise in enquiries of unemployment cover is no exception. Figures from the Office for National Statistics (ONS) show the UK unemployment rate hit a five-year high of 5.2% at the end of 2025, while unemployment among young people aged between 16-to-24-years-old also rose to 16.1% – the highest it’s been in more than 10 years.
Add to this the ongoing uncertainty in the Middle East, which is placing increased pressure on the global economy, leading to a further tightening of household and employer budgets, and it is unlikely that things will improve any time soon.
Read more on Mortgage Soup!
Rated