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The Resolution Foundation report that lower-income families have borne the brunt of the Covid crisis

A new report by the Resolution Foundation explores the past 12 months of the pandemic, our Government’s response to it and the impact this has had our economy and our collective physical and financial health.

The report finds that the past year has been marked by big successes on income support and vaccines. Over £186 billion in emergency Covid-19 support has directly supported households and firms via the furlough scheme, benefits uplift and grants for companies and the self-employed. However, several crucial issues were highlighted by the report:

  • The delay during the autumn in confirming the extension of furlough - meant that redundancies rose to 400,000 in the three months to November

  • Many families have fallen out of work and onto benefits – with a typical fall in income of 40%

  • The targeting of the Self-Employed Income Support Scheme (SEISS) has not been successful - about 1.5 million people (three in-ten self-employed workers) have seen lower profits as a result of Covid but have not been eligible to receive a grant through the scheme

  • The exclusion of legacy benefits such as Jobseeker’s Allowance and Employment and Support Allowance from the £20 per week Universal Credit uplift- has resulted in increased hardship for the groups entitled to these payments

  • Policy is on sick pay- two million low earners are excluded, and those who qualify receive £96 a week (a quarter of their earnings, on average), resulting in many feeling that they have not be able to stay at home to help protect lives

Delays to lockdowns also meant that they have subsequently had to be tighter and longer lasting, leaving the UK to experience among the most stringent restrictions of all G7 economies over the past year. The report sets out that this pandemic will have a lasting impact on the living standard of many households. This will unfortunately be a legacy of the pandemic, and one which is felt very unequally with the report showing:

  • Poorer households have borne the brunt of the health and economic crises- recent mortality rates in the most deprived parts of England have been almost twice those in the least deprived areas

  • The poorest fifth of households are 50 per cent more likely to have seen their savings deteriorate rather than rise during the crisis

  • The workers who have been most affected by the crisis are low earners and younger workers- who are disproportionately likely to have worked in sectors fully or partly shut down

  • Those with the least power in the labour market have been more likely to have experienced job loss or a fall in earnings- such as those on insecure contracts or from certain ethnic minority groups

  • It has become more expensive to live on a low-income through the pandemic - due to a range of factors such as having children at home more of the time, the closure of in-person support services, and changes to major supermarkets’ pricing strategies. In September 2020, 36 % of low-income households with children had increased their spending during the pandemic

  • The poorest fifth of households are also twice as likely to have seen their debts rise during the crisis- in contrast, the richest fifth of households are twice as likely to have seen their debts fall.

The report adds to the growing body of evidence that while the Covid-19 pandemic has touched everyone, lower-income families have felt the impacts of the crisis more severely. It forms part of the increasing calls to put targeting structural inequalities at the centre of plans to rebuild post-pandemic Britain.


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