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Bernie, I can really sympathise with you on this one. I was made redundant in August 08. I was a Residential Conveyancer, and for obvious reasons, the need for my services became pretty unnecessary during the property crash. I can no longer count the number of jobs I've applied for over the last 18 months, and have not had any success in any of the applications.
I'm only 27 with a strong educational background, and a young family. From feedback following interviews, I have found out that I have all the skills necessary and am an ideal candidate; however the firms can get an older person with far more experience than me, for the same salary. Either this, or they employ someone straight from college / uni for minimum wage.
The Job Centre have been less than useless on this occasion, and have only succeeded in stressing me out to the max. I too found that I could only claim contribution based JSA for 6 months, and was not entitled to income-based due to the fact that I owned a property (which we cannot afford to live in, so rent out for a loss of £25pcm) and they considered this an income!!! We can't even claim housing assistance, and have had to resort to living with family.