Families hit harder because nothing for children in Covid-19 response

Published on: 
12 May 2020
Written by: 

Tom Lee

Senior policy analyst

Covid-19 has clearly had a massive impact on household incomes in the UK. Millions of people have lost their job and millions more have been furloughed. It will take a while to understand the complete effect of Covid on household incomes but some initial quantitative findings can help shed light on the effect of the pandemic on families.

ONS's Opinions and Lifestyle Survey had a Covid-19 module which asked people about the effect of Covid on their household finances. Around 1 in 4 people reported having their household finances affected by Covid. However, there were big differences by household type. 39% of parents reported having their household finances affected compared to only 22% of non-parents.

Another source of data is a recent YouGov poll that asked questions about the financial impact of Covid. Academics from Bristol placed households into four categories based on their responses -  financially secure, potentially exposed financially, struggling to make ends meet and in serious financial difficulty. 11% of households were found to be serious financial difficulty and a further 17% were struggling to make ends meet.

It is possible to breakdown these figures by household type. The data indicates that, again, it is families who are disproportionately affected. 18% of families (households with non-adult children) are in serious financial difficulty compared to only 9% of other households.1 A further 24% of families are struggling to make ends meet (15% of other households). This works out at 3 million families currently in financial difficulties.

So why are families so disproportionately affected?

  1. There was nothing family focused in the Covid policy response. The pandemic response measures guaranteed 80% of previous earnings for large sections of the workforce but there was nothing specifically for children.
  2. Parents work differently from non-parents. 62% of parents reported having their work affected by Covid, compared to only 35% of non-parents. This could be due to parents working in different sectors from non-parents, the working patterns of second earners (usually mothers) who balance work with childcare commitments or being unable to currently work as a result of school closures.
  3. The lasting impact of austerity. While austerity affected most low-middle income households, there were many policies which particularly affected children and families. Child benefit is worth substantially less in real terms than in 2010, the two-child limit is affecting a growing number of large families with 3 or more children and the vast majority of households affected by the benefit cap are families.

While the government response to Covid has cushioned the blow for many households, a lack of support for families coupled with a decade of austerity means that 2 in 5 families are in financial difficulties. Scrapping the two-child limit, removing the benefit cap and increasing child benefit by £10 per week would all help to support families struggling to manage the financial impact of the pandemic and associated public health measures.

  • 1. Author's calculations from Coronavirus Financial Impact Tracker, 2020