Employment matters

The economy is finally starting to recover; we are no longer in recession and forecasts are sounding more upbeat about the future growth in 2010. However, there are still significant problems to overcome. One is inflation, which has now risen to 3.4%, 1.4 percentage points above the 2% target.

Unemployment is at 7.8%, meaning 2.45 million people of working age are out of work and there are 1.59 million claiming job seekers allowance. All this is putting pressure on those in work to bolster the economy. Therefore being employed has never been more important.

If you are currently unemployed, or maybe you are a recent graduate trying to break into a very tough job market, you are facing stiff competition. Never have there been more qualified people out of work. For first jobbers in particular this poses a huge challenge. You, with little or no experience are going up against people with far more experience both in life and work because there are fewer high-level jobs available to these experienced workers.

Making yourself more attractive to employers is key. You need to do your research, thoroughly prepare for interviews and get your CV out there on as many job sites as possible. Looking for employment right now is a full-time job in itself.

The number of vacancies is finally beginning to grow however. So in the coming months the situation should ease and unemployment should fall. However, with the labour market not being as stable as it was for our grandparents' generation, i.e. no more 'jobs for life', once you have a job, you need to start saving.

There are numerous savings options available to you. These include standard instant access savings accounts, bonds and ISAs. Seeing as inflation is so high at the moment, you need to look for an account with the highest rate of return possible. The Bank of England's interest rate is at an all-time low right now, so this isn't going to be easy.

The best way to get the highest AER possible is to leave your money in one place for as long as possible. A good example comes from Alliance & Leicester. They have a variety of savings options available to you, including instant access accounts and ISAs, but currently the best option is their two year fixed rate bond. You can earn 3.5% gross AER per annum when you invest over £10,000 and 3% from £1 upwards. What's more this rate is fixed until 1 May 2012, regardless of the inflation rate and the Bank of England's base interest rate. It makes sense to plan for a rainy day, just in case the economy doesn't return to its former glory soon enough.