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Extra living costs pile financial pressure on low-income families during lockdown

Posted on 12 January 2021

The pandemic has placed significant financial pressures on poorer households – with the cost of extra food, energy, and remote learning having a greater impact on low-income families, a new study shows.

The research revealed that low-income families with children are twice as likely than other families to have increased their spending during the pandemic. 

The study - a collaboration between the University of York and the Resolution Foundation -  discovered that while higher income families may have saved money as social activities have been curtailed by public health restrictions, the pandemic and ensuing lockdowns have made it more expensive to live on a low income with children.

The findings included:

• Parents identified that having children at home 24 hours a day led to higher food and energy bills, while the need to entertain them during the lockdowns, in place of activities such as visiting families and public libraries, has brought additional costs.
• They identified additional costs associated with home-schooling, such as acquiring laptops, paying for internet access and obtaining additional study materials.
• Families noted that the cost of buying food had risen, due to the reduction of in store promotions, and because the need to shield has forced many to use more expensive home delivery options, while the need to avoid public transport meant those without access to a car have had to use more expensive shops closer to home.

The research called ‘Pandemic Pressures’ -  is part of the ongoing Covid Realities project led by Dr Ruth Patrick from the School for Business and Society.

Dr Patrick said: “The idea of being able save money during this pandemic is just a world away from the experiences of the parents and carers we’ve been working with through the Covid Realities research project.

“Parents have found their spending increase, as some of the usual strategies they use to get by on a low income – shopping around for the best deal, going to families and friends for a meal when the cupboards are empty – have become suddenly impossible. 

“The conditions the pandemic has created make it harder still to get by on a low-income, creating extra financial pressures, rooted in the requirement for families and their children to stay at home and restrictions on household mixing."

Pandemic 

The report found that more than one-in-three (36 per cent) of low-income households with children increased their spending during the pandemic so far, compared to around one-in-six (18 per cent) who reduced their spending. 

Among high-income households without children, 13 per cent have increased their spending, compared to 40 per cent who have reduced it.

Dr Patrick added: “While the need for the lockdown is clear, there is an equally urgent need to address the additional financial pressures that families on a low-income face through greater income support to families with dependent children.”

Lockdown

With the third national lockdown likely to last several months and put families under further pressure, the report calls on the Chancellor to urgently do more to support family incomes during the pandemic.

Mike Brewer, Chief Economist at the Resolution Foundation, said: “The pandemic has forced society as a whole to spend less and save more. But these broad spending patterns do not hold true for everyone.

“With the country going into another lockdown for at least the next few months, the Chancellor should acknowledge the pandemic pressures that families with children face and reconsider plans to cut Universal Credit in just a few months’ time.”

Covid Realities is supported by the Nuffield Foundation.