The scandal surrounding the mis-selling of Payment Protection Insurance (PPI) has given the UK’s ailing economy an unlikely boost by creating around 20,000 new jobs.
As all of Britain’s major banking groups, including Lloyds and Barclays, set millions of pounds more aside to pay compensation, they have also been hiring new staff to deal with the vast volume of PPI claims.
According to the Manpower Group’s 2013 Employment Outlook Survey, the big banks have created the roles to help with the huge demand for PPI compensation and the figures do not include posts created by claims management companies.
“Despite attempts to put a lid on the amount that the banks pay out on PPI, within the last month alone we have seen big names like Barclays and Lloyds massively raise the amount of money set aside for PPI claims,” said Mark Cahill, the UK managing director at Manpower.
Barclays have already announced they will be adding £600million to their provisions for PPI compensation, while Lloyds has already spent £5.3billion on the crisis and Royal Bank of Scotland has added a further £400million to its own provision.
“A whopping £11bn pounds has already been allocated, and some commentators think that number could easily double,” added Cahill. “The consequence of this will not only mean cash in people’s pockets, it will also translate into jobs.”
But he warned: “We must not be fooled by the figures. These extra jobs are not a sign of a thriving banking sector looking optimistically to future growth – these roles are all about clearing up mistakes from the past.”