NEW SURVEY: the toll of lockdown on low-income families | CPAG

NEW SURVEY: the toll of lockdown on low-income families

Published on: 
25 August 2020
  • 8 in 10 hard-up families said they were financially worse off as a result of the pandemic
  • Almost half have had physical or mental health problems because of coronavirus
  • Parents worry about not meeting children’s needs - “I feel like a bad parent at the minute”
  • 48% have a new or worse debt problem
  • 23% experienced a relationship issue at home
  • 46% have taken on extra caring responsibilities

Coronavirus has left low-income families struggling with a significant deterioration in living standards and high stress levels a new report from Child Poverty Action Group and the Church of England finds. Families who responded in July and early August were even less optimistic about their financial situation than those who responded in May or June.

The report, POVERTY IN THE PANDEMIC: impact of coronavirus on low-income families and children - based on a survey of 285 low-income families with children who are eligible for free school meals - found around 8 in 10 respondents reported being in a worse financial position than before the pandemic, and half were much worse off * because their income had fallen while costs have risen (see parents’ quotes below). online survey was supplemented by in-depth interviews with 21 of the families who responded.

Nearly 9 in 10 survey respondents said they were spending substantially more than before on food, electricity, and other essentials –usually because they have been at home much more. Many families also said that the cost of food had gone up significantly during the early part of lockdown.

More than three-quarters of respondents said the coronavirus has affected their ability to pay for food (83%) and utilities (76%) and around half said it has affected their ability to pay for housing (47%) and child-related costs (e.g. nappies or baby products, children’s clothes – 53%). Nearly 6 in 10 families are struggling to pay for three or more of these basic essentials (58%).

Even among those families whose employment had not been affected – including those who were not working prior to the pandemic- around two-thirds reported a significant worsening in their financial situation, largely due to an increase in living costs.

Of the 21 families interviewed, nearly all were claiming benefits before the coronavirus crisis (even if only child benefit). Some interviewees and a handful of survey respondents were positive about their experience of claiming benefits, or the changes made to their existing benefits, as a result of coronavirus with a small number saying they have particularly appreciated the temporary £20 uplift in universal credit and one survey respondent mentioning the ability to request an advance as particularly helpful

But even families who had received the uplift in benefits did not generally feel better off, because the change did not take into account the additional needs of children and was offset by increased living costs.

Of those parents interviewed, and those survey respondents who commented on their experience of claiming benefits or having their benefits changed because of the pandemic, the majority said they had had problems with the social security system. In particular they highlighted:

  • the inadequacy of benefit levels to cover basic living costs, especially for those who had previously been working;
  • the long waiting period and additional delays in receiving the first universal credit payment, coupled with the variability and uncertainty in the amounts received;
  • the impact of the benefit cap on families who had been furloughed at less than their full pay, taking them below the income threshold at which they would be exempt from the cap
  • Difficulty in knowing where to look for advice on claiming benefits and other support.

Asked how the Government could best support them to manage the financial impact of coronavirus, parents in the survey and in interviews overwhelmingly said increasing their family income would be the main way the government could help. The other two most popular choices for extra help were lifting the benefit cap and increasing the access to free school meals (FSM) vouchers. The study found that many families who are entitled to FSM were not in fact receiving them.

In light of the findings, Child Poverty Action Group and the Church of England call on the Government to:

  • Increase child benefit by £10 a week and add an extra £10 a week to the child element within universal credit and child tax credits
  • Extend free school meals to all families who are in receipt of universal credit or working tax credit, with a view to bringing in universal free school meals for all children in the long term
  • Abolish the benefit cap, or at least suspend it for the duration of the pandemic, to protect families whose employment has been disrupted by the crisis.

About two-thirds of survey respondents had been working before the pandemic or had a partner who had been working and most of this group had either lost their job or seen a significant drop in their earnings or income from self-employment, including furloughed workers on less than full pay.

Some had the benefit cap applied to them because being furloughed left them with wages below the earnings threshold at which people are exempt from the cap.

Some have missed out on the government’s temporary income support schemes, because their employer refused to furlough them or because they have only recently became self-employed. And some said their ability to hold on to a job or to find a new one was reduced because they are having to take on extra childcare responsibilities or they faced restrictions on childcare provision, as well as a lack of job opportunities.

Commenting on the findings, Chief Executive of Child Poverty Action Group Alison Garnham said:

“Low-income parents have been living under a cloud of anxiety in lockdown -trying to find money for family basics as their costs have been rising. That’s taken a very heavy toll on the health and well-being of the worst affected parents and children.

"We all want to protect children and families from the effects of the coronavirus recession and to prevent a growth in poverty following the pandemic. But the support we offer low-income parents just doesn’t meet the additional costs of raising children and there was nothing in the Government’s emergency support schemes to correct this shortfall. Child benefit alone has lost £5 of its value since 2010 because of sub-inflationary uprating and freezes. Re -investing in children’s benefits and widening access to free school meals should be the priorities now to protect family incomes and to support children’s life chances. As the Government’s Covid-19 emergency support schemes are tapered away in the coming months, more help will be needed for struggling families who have lost jobs or taken income drops. Otherwise they will have only more hardship on their horizon.”

The Bishop of Durham, Paul Butler, who speaks for the Church of England on matters relating to children and families said:

“Although some commentators have talked about the last few months as an opportunity to live a simpler lifestyle, this report sets out in stark detail how for many families it has been a constant struggle.

“It bears out what churches have experienced first-hand in every community: that families have been placed under huge strain; that the worst off have again been worst hit and, for many, things now could get worse rather than better.

“In these unprecedented times, we all need to ask ourselves urgently how we can help our neighbour. It is also imperative that the Government does all that it can to protect families and children by implementing the practical recommendations in this report. We all must play our part."

Financial impact:

Parents said:

“…, we’ve had to cut down quite a bit, not have the diet we had before when I was trying to make sure that they get a balanced diet. I just manage whatever I can make, really... with fruit and everything being so expensive, you just have to get what’s affordable.” (Ann-Marie)

“I went round Lidl with a list and a calculator to try and get everything I possibly could at the lowest possible price. It has just meant worry and stress and anxiety because ultimately, I think if you’re presented with a tough situation, as long as you can see a light at the end of the tunnel it gives you strength to move forwards. We haven’t had that. In terms of financial impact, it’s meant absolutely counting every penny.” (Claire)

“I lost my job beginning of March and been unable to find a new job as my son’s nursery closed to the pandemic. I am in more debt and struggling to pay bills and feed my son and myself.” (Survey respondent)

“My childminder couldn’t work so didn’t have childcare to work so had to give up my job. I’m also trying to catch up with debts and I am struggling due to having no job.” (Survey respondent)

“My money goes in on the 5th, so I try and have all my bills sorted around that date, and then it’s just a constant worry. Is there enough money in the account to pay everything? Is there enough money in the account to put some food on the table? For about three weeks I’m not too bad, but then there’s that week around pay day that I’m just all over the shop. I get irritated and things like that, just worrying about what the outcome is going to be.” (Graham, father of two children made redundant a year ago due to ill health)

Although some families had problems with accessing FSM vouchers - or found they are ineligible despite their low income - families who had received vouchers said how much they had appreciated them:

“I get free school meals, you know, vouchers. That has helped a hell of a lot. People don't understand how much it has helped. I think if it weren't for that, I don't know what I'd do… I think that [the government] have done all right, to be honest, like the free school meals. I said it was a Godsend to me.... I couldn't have coped without it.” (Karen)

“It’s been easier since they provided the school vouchers and the college vouchers, while they’ve not been at college…. So you put that on one side and say, ‘Right, there’s £30 for this week and £30 for next week, so we’ll keep that on one side and we can do some shopping.’ So at least that gave us a little bit of extra money to buy food with.” (Graham)

Very few families had received discretionary crisis support from their local authority despite the extra funding allocated to councils from central Government for this purpose. None of the families interviewed reported receiving additional local council tax support as a result of coronavirus. Six respondents to the online survey said they had received a council tax reduction. Only one respondent to the online survey, and only one of the interviewees, reported receiving assistance from a local welfare assistance scheme. Twenty seven families had accessed a foodbank as a result of the pandemic.

Non-financial impacts:

Almost half (48%) of respondents said they had experienced physical or mental health problems – often because of money worries - while 46 per cent had taken on extra caring responsibilities. Almost a quarter (23%) had experienced relationship issues at home and 1 in 5 said they had experienced difficulty accessing key services.

Some families have expanded during the lockdown, as older children have returned home or elderly relatives have moved in with them, creating an additional financial burden on household finances and in some cases overcrowding.

Parents said some of their children were suffering from stress and physical or mental health problems as a result of the pandemic too. In most cases teenagers or young people were most affected but interviewees made clear that younger children were suffering too.

Mum Jade said:

“I feel like a terrible mother at the minute. All the other neighbours have all got swimming pools out in their garden and stuff, and they’re like, ‘What can we do in the garden, the sun’s out,’ and we can't do nothing. I just feel really mean.”

One mother (Sharon) worries about feeding her 17-year-old son over the summer:

“Worried. Worried that the price of everything is going up. There are no offers in our local supermarkets. So, worried that things will start to get very tight. And, with the long summer ahead, there are still three or four meals we need to provide for, my son in particular.”

A Dad, Graham, described not being able to cheer his daughter up by giving her money:

“I’ll break down and cry some days, I’ll go to my bedroom and cry, because I can’t give her £20 to go and buy something.”

Other parents struggled with having children at home all the time:

“Not having a break from my children because of them not attending school has had a major impact on my anxiety and depression, causing a lot more emotional outbursts either in front of my children or even when I’m alone.”

Another parent said:

“I suffer with mental health issues but have continued to work through the pandemic as I can’t afford not to. Now though this had had such a significant impact on my mental health that I am on ridiculous amount of medications and am awaiting a referral. If I had been able to [reduce] my hours slightly to cope I possibly wouldn’t be in this situation now. This was not an option due to finances.”

And some parents reported that their children were stressed:

“They can see there is no money. I’m trying to sell my things, my jewellery so they can have their TV. I don’t know if that’s going to be in two months’ time, but for now, especially also for the 19-year-old, I don’t want her to know everything that’s happening because she gets very bad panic attacks and anxiety. I try to hide as much as I can from them, but yes, they know.” (survey respondent).

“My child is very sad, she isn't herself anymore the Covid-19 has crushed her and she believes she has no friends which I have been trying my hardest to [reassure] her isn't true - everyone loves her we just can't go there it destroys me hearing this…”(survey respondent)

Notes to Editors:

Today’s report, POVERTY IN THE PANDEMIC: The impact of coronavirus on low-income families and children is here

*Worse off is defined as moving one category downwards, and much worse off is defined as moving two or more categories downwards, on the subjective financial situation scale (living comfortably, doing all right, just about getting by, finding it quite difficult, finding it very difficult).

Parents’ perception that prices rose early on in the lockdown is backed up by a study by the Institute for Fiscal Studies, showing that grocery prices rose by 2.4 per cent in the first month of lockdown (over 10 times the rate in preceding months), due in large part to a fall in the frequency of promotions. More recent analysis, based on ONS data, suggests that the average price of all food and household items had fallen back to normal by early July.

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). Parents with children in reception, year 1 and year 2 would normally benefit from the universal infant free school meals scheme, but did not automatically qualify for the replacement food voucher scheme while schools were closed during lockdown.

The government has provided some additional funding to local government to provide financial support to residents in their local area. In March, £500m of hardship funding was provided to local authorities, with the majority of this earmarked for providing local council tax support. Any additional funding that remained could be used to provide local welfare assistance or other forms of discretionary crisis support. In June the government announced an additional £63m for local authorities in England to help them provide local welfare assistance to their residents.

Methodology

The analysis in this report draws on an online survey of 264 low-income families with children and in-depth interviews with 21 of these families. This survey was carried out between the beginning of May and the end of July 2020, using the Entitledto benefits calculator (https://www.entitledto.co.uk/) to identify families who qualify for FSM. Anyone meeting the eligibility criteria for FSM was invited to complete a short online survey about the financial impact of coronavirus (see Annex of the report for a copy of the questionnaire).

In addition to the online survey, we also conducted semi-structured interviews with 21 of these families, in order to explore the financial effects of the pandemic in more depth, including changes in income and spending patterns; knock-on effects on health and family life; and further information on the support they have received or would have found helpful.

Our sample was drawn from online respondents who said they would be willing to be contacted for more information. Interviewees were selected using a sampling grid to ensure a mix of families: family type, employment status and region were broadly representative of the whole sample, with the exception that all of the interviewees live in England.

CPAG media contact: Jane Ahrends on 07816 909302

Church of England Press Office 020 78981326 or comms@churchofengland.org