Poverty in the pandemic: An update on the impact of coronavirus on low-income families and children

In August, Child Poverty Action Group and the Church of England published a report, Poverty in the Pandemic, which offered a glimpse into the lives of low-income families trying to survive the impact of the coronavirus pandemic. This report provides an update on how families with children are managing financially, based on an additional 393 online survey responses received in the period since the last report was published, up to the end of November 2020. The key findings are:

• Overall, around three-quarters of the families who responded to our survey said they are finding it “difficult” or “very difficult” to manage financially. This proportion has remained fairly constant throughout the pandemic, with no sign of improvement in recent months.
• In the three months to November 2020, nearly nine in 10 respondents had experienced a significant deterioration in their living standards compared with their situation before the pandemic – up from eight in 10 families who responded to our survey between May and July 2020.
• A higher proportion of families who responded to our survey from September to November 2020 reported losing employment. Many said they had never been in this position before, having worked all or most of their working lives, and were struggling to cope on universal credit.
• Even among those who were not previously in paid work, or whose employment had not been disrupted, around three-quarters of families are finding it harder to manage financially, due to rising living costs, additional caring responsibilities, reduced child maintenance payments and problems accessing other financial support.
• As a result of the pandemic, nearly six in 10 families said they are struggling to cover the cost of three or more basic essentials, including food, utilities, rent, travel or child-related costs. Around half of all families said they have a new or worse debt problem.
• A high and rising proportion of low-income families have also experienced a mental or physical health problem as a result of the pandemic – up from 48 per cent between May and July to 56 per cent between September and November 2020. The open-ended survey responses include a worrying number of references to the effect on the wellbeing of children, as well as adults. It is clear that financial problems are adding considerably to the pressures on families, pushing many of them to breaking point.
• An increasing proportion of families are becoming reliant on the social security system, as the unemployment rate continues to rise. This is exposing problems with the current system, including the five-week wait for the first payment in universal credit, inadequate benefit levels, and the severe effect of the benefit cap and two-child limit on families.
• To address increasing financial difficulties, we recommend that: the £20 per week uplift to universal credit and tax credits is retained and extended to other legacy benefits; children’s benefits are increased; eligibility for free school meals is expanded; and the two-child limit and benefit cap are lifted. Only then will we ensure that low-income families with children receive the support they need over the difficult months and years that may lie ahead.