New survey shows deteriorating living standards for low-income families as a result of Covid-19

Published on: 
14 December 2020
  • Nearly 9 in 10 low-income families with children now worse off due to the pandemic, up from 8 in 10 in summer 2020
  • Three-quarters of low-income families finding it “difficult” or “very difficult” to manage financially, with no signs of improvement
  • Employment loss, rising living costs and additional caring responsibilities causing financial strain
  • Nearly 6 in 10 low-income families struggling to cover the cost of three or more basic essentials, including food, utilities, rent, travel, or child-related costs
  • Half of all families said they have a new or worse debt problem
  • More than half of low-income families have had a physical or mental health problem as a result of the pandemic

Low-income families with children are even worse off now than they were in the summer, the latest Poverty in the Pandemic report from Child Poverty Action Group (CPAG) and the Church of England shows. Nearly 9 in 10 families report a significant deterioration in their living standards because of the pandemic – up from 8 in 10 families who responded to an earlier survey between May and July 2020.

The report, based on a survey of 393 low-income families with children eligible for free school meals, shows rising loss of employment and an increasing reliance on the social security system. This has exposed problems with the social security system including the five-week wait for universal credit, inadequate benefit levels, and the severe effect of the benefit cap and two-child limit on families. Financial problems are pushing families to breaking point with a growing proportion dealing with mental and physical health problems. (See parents’ quotes below).

In most families where there was previously at least one adult in paid work, either one or both parents had lost their job or hours, or experienced a significant reduction in their earnings or income from self-employment, as a direct result of the pandemic.

Nearly 6 in 10 respondents struggled to meet the costs of 3 or more basic essentials, with 80% struggling to pay for food, 75% struggling to pay for utilities, and 53% struggling with costs related to children.

Financial problems are adding to the pressures of restrictions and social isolation on families. Nearly a quarter of respondents said that the pandemic had led to relationship issues at home.

The temporary £20 uplift to universal credit and working tax credits was highlighted as a source of additional support that was appreciated by many families, but some groups have been excluded from the increase (claimants of other legacy benefits) or have not been able to benefit from it due to the effect of benefit cap. Working families who experienced sudden and severe drops in income are having to rely on universal credit and are struggling to manage financially. The two-child limit has also been highlighted as severely limiting family incomes during the pandemic.

CPAG and the Church of England are calling for a series of measures to ensure low-income families with children receive the support they need over the difficult months and years ahead: retaining the £20 per week uplift to universal credit/tax credits and extending it to other legacy benefits; increasing children’s benefits; expanding eligibility for free school meals; and lifting the two-child limit and benefit cap.

Alison Garnham, Chief Executive of Child Poverty Action Group, said:

“This report shows that things are getting worse for low-income families. Far from seeing signs of recovery, we are witnessing a rapid deterioration in family finances and gloomy future prospects, with long-term unemployment likely to hit many more across the UK in the coming months. The mounting financial and health pressures on parents are leading many to breaking point.

“For low-income families, Christmas has always been a difficult time. This year will be even worse - worrying about being able to feed their children and keep them warm can transform the festive season into one of fear and anxiety.

“We urgently need to lift the threat of a reduction in universal credit and tax credits in April 2021 and to protect families and children from further hardship by increasing investment in children’s benefits and abolishing the cruel two-child limit and benefit cap policies. This would make a huge difference to families with children, and would show that children haven’t been forgotten as we tackle the aftermath of the pandemic in 2021.”

The Rt Revd Paul Butler, Bishop of Durham said:

“Our report offers a stark insight into the experiences of low-income families with children, whose lives have been turned upside down by the pandemic. As more people lose their jobs and become reliant on social security, we are seeing the inadequacies of the current system laid bare. Urgent action is needed to prevent a sharp rise in poverty and destitution over the challenging months ahead, starting with a commitment to retain the £20 per week uplift to universal credit and extend it to other legacy benefits.

“At this difficult time for us all, we must continue to remember those who are suffering most - not only by supporting local charities, but also by advocating for a more generous social security system and for the deep radical changes needed to tackle the underlying drivers of poverty in the longer-term.”

Parents who responded to the survey said:

Worries in the run up to Christmas:

“It’s scary as we don’t know what’s happening after this lockdown. I fear more of being on my own with my son the whole of Christmas rather than financial worries. Financial worries are also at the top of my list and I worry I won’t be able to give my son food and keep him warm over Christmas as it’s getting colder and more expensive to heat the home and feed us both.” (Single parent with one child, Yorkshire and the Humber)

“[Christmas] will be very much a struggle, we won’t be able do gifts this year as [we] had no money to put away towards Christmas so it’s going to be a sad year that my children won’t have gift to open from us.” (Couple with two children, South East, full-time carer for husband)

“Christmas can be a tough time for anyone but just being able to spend it with family is something money cannot buy… “I love you” is the best present money can’t buy.” (Single parent with one child, South East, working part time)

Impact of the pandemic on family finances:

“Me and my partner have both worked since 16 and both lost our jobs due to coronavirus. We were forced to live off JSA and universal credit which made our net income £600 less than our normal wages. As a result we had to rely on friends and selling anything valuable we had to get money for food and electricity.” (Couple with two children, East of England, previously working full-time)

“My ex-partner reduced child maintenance payments significantly, which has left me in hardship. My bills have increased, I spend more money on food. I have struggled with new school uniform costs.” (Single parent with two children, West Midlands, not in paid work)

Struggle to meet the costs of children, often at the expense of parents’ own welfare:

“I’m struggling even though I’ve started work 16 hours a week. I’ve just had to isolate for 8 days, so will lose pay. I was not working throughout lockdown as I couldn’t get a job as I’m a single parent and had to take care of the children. I barely ate throughout that time. I’m losing a week’s pay and my children need shoes and clothes… I need to feed them and keep them warm.” (Single parent with three or more children, North East, working part-time)

“It’s terrible, I’m scared every day. I kept my children off school as I can’t afford uniform. I live on porridge or cereal.” (Couple with three or more children, Yorkshire & The Humber, self-employed)

“Went from being able to provide quite well for me & my son to now being unemployed, extremely anxious of how I’m going to cover the costs of bills & general cost of living especially coming into winter months when heating & electric costs will increase.” (Single parent with one child, Northern Ireland, previously working part-time)

Struggle with mounting debt:

“Struggle to pay my bills, feed my children. I'm slowly sinking into debt.” (Single parent with two children, South West, working part-time)

“I was furloughed from work, but got a call on 30th June to say I was being made redundant. My employer has stopped paying me, so I have no income. My partner lost his job on 4th July and has just started getting JSA (job seekers allowance). We are on the breadline and living on credit cards.” (Couple with one child, East Midlands, previously working full-time)

“I lost my job due to coronavirus, the delay between applying for benefits and receiving them has put me in debt. It’s nearly a month on and I'm still not getting the full benefit amount.” (Single parent with three children, North West, previously working full time)

Delays in first payment of universal credit:

“I have been so ill (with Covid) that I did not know until weeks later that I had lost my job, as I had not been able to deal with any post. I have only just managed to apply for any benefit help, so we have had no income for many, many weeks, I can't even think clearly enough to work out how long. The fatigue, and brain fog, make seeking help right now so hard - even the simplest things like conversations are difficult to comprehend, so trying to apply for benefit has taken me several attempts over about 4 weeks, even with the help of a friend. All that time is obviously lost now as benefits start from the day the claim is finally finished and submitted.” (Single parent with one child, South West, previously working part-time)

Benefit cap and adequacy of benefit payments:

“The government has given single over 25s an extra £20 a week to help out in the pandemic, but with three kids…it has taken me over benefit cap….so they give to us in one hand and snatch the majority of it back before (we have had the) chance to close the hand.” (Single parent with three children, North East, not in paid work)

“I've gone from earning £2500 [a month] to getting benefit of £74 a week. I've worked all my life, have 37 years of [National Insurance] contributions and they have given me £74 a week. I will lose my house, my car, my life through no fault of mine.” (Single with one child, East of England, previously working full-time)

Two-child limit:

“Before covid I was a full time working mum of four children….. due to covid I have lost my job, been forced to go to a food bank so I could feed my children, and had to rely on family members to help towards my bills. My 13 year old son now has to cycle four miles to and from school as I cannot afford a bus pass or the fuel to take him daily. My 10 year old has to walk to school, two miles each way. My two year old daughter no longer goes to her childminder as I cannot afford it. I have four children yet only get help with two of them even though I’ve worked full time for six years. Covid 19 is the reason I no longer have a job and it's wrong to penalise hardworking parents.” (Single parent with four children, South East, previously working full time)

“(Coronavirus has) totally wiped us out in more ways than one. And because of the two child limit plus the benefit cap….we now have our creditors chasing us for payments. We are behind with everything. This has had a major impact on the whole family…..removing the two child limit or the benefit cap would help thousands of people and end poverty and not create it.” (Couple with three children, South East, previously working part time)

Worry about children’s wellbeing:

“It’s extremely hard being at home all the time just me and my daughter. My daughter has started self-harming again and my mental health has gotten worse. We argue more than usual but we love each other and that is what’s getting us through.” (Single parent with one child, London, not in paid work)

Strain on family relationships:

“Coronavirus has exacerbated my whole family’s mental health to the point that we are about to break up. Stress, anxiety and strain in terms of finances have broken us as a family and created so many other issues between us all.” (Couple with one child, South East, previously working full-time)

Lack of support services during the pandemic:

"My younger son has hearing problems and cannot access health care specialists and I cannot visit my GP due to restrictions on Covid-19. I am in a progressively worse mental health state than I was six months ago.” (Single parent with two children, East of England, previously working full time)

Free school meals:

“My children don't qualify for free school meals as I normally work 16 hours a week and get working tax credits. I work employed and self-employed and last year my annual income was £5600… I could really use a free school meal for my children….I wish free school meals on working tax credits were possible.” (Single parent with three children, East of England, working part time)

Worry about the future:

“The next few months I don’t know…I am panicking because my job, it’s only from an agency, they only call when they have work. Until Christmas time I have a job, after I don't know how we will manage.” (Couple with 2 children, working part time / previously working full time)


Notes to Editors:

  • The report, Poverty in the Pandemic: An update on the impact of Covid19 on low-income families and children, is available online at this link. The first Poverty in the Pandemic report, published in August 2020, is available here.
  • The benefit cap limits the total amount of benefits a household can receive.
  • Universal credit and working tax credits were increased by £20 per week as part of the Government’s coronavirus financial support package. So-called legacy benefits have not been increased.
  • To qualify for free school meals, parents must have a school-age child, be receiving one of a list of means-tested benefits and have earnings below a set threshold. In practice, this covers nearly all non-working families and working families on very low incomes (earning less than £7,400 a year if in receipt of universal credit or not in receipt of working tax credit, if on legacy benefits).
  • Methodology: This report is based on an online survey of 678 low-income families with children between May and the end of November 2020 (including 393 responses received since the first report in August). The survey was carried out using the Entitledto benefits calculator to identify families who are likely to qualify for free school meals, based on their household income and other criteria. Potential respondents were invited to complete a short questionnaire about the financial and non-financial effects of the pandemic on them and their children, as well as the support they have received from the government and others. 10 families who participated in in-depth interviews for the first report also completed follow-up surveys.

CPAG media contact: Léa Corban on 07816 909302

Church of England Press Office 020 78981326 or [email protected]