Toll of lockdown on low-income families revealed in new report

By agency reporter
August 26, 2020

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: The 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 eight 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  The online survey was supplemented by in-depth interviews with 21 of the families who responded.

Nearly nine 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 per cent) and utilities (76 per cent) and around half said it has affected their ability to pay for housing (47 per cent) and child-related costs (e.g. nappies or baby products, children’s clothes (53 per cent). Nearly six in 10 families are struggling to pay for three or more of these basic essentials (58 per cent).

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. One survey respondent mentioned 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 become self-employed. Others 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, the 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."

* Read POVERTY IN THE PANDEMIC: The impact of coronavirus on low-income families and children here

* Child Poverty Action Group https://cpag.org.uk/

* Church of England https://www.churchofengland.org/

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