New COVID data shows that lowest paid and single parents are hit hardest by loss of earnings

New data released today by Understanding Society shows that earnings have fallen for households across the UK, but particularly for the lowest earners, and with severe losses for single parents.

In the highest income bracket, average earnings in February stood at £832 a week, and fell by £46 a week. In the lowest income bracket, they fell £43 a week, but from an average of £297. On average, single parents’ earnings fell by more than double the amount experienced by households with children and more than one adult.

The new figures cover respondents aged between 20 and 65 taking part in a regular Understanding Society survey of the UK population’s experiences of the Covid-19 pandemic. The Covid-19 survey interviewed 17,450 respondents who are part of the established longitudinal study, which is representative of the UK population as a whole. The survey asked people about their circumstances in the last week of April, and what their circumstances had been in January and February.

The data show that nearly 18% of the lowest earners were behind on their household bills, compared to just 2% of those in the highest income bracket. The lowest earners were also over five times more likely to report that they had been hungry but not eaten at some time in the last week2.

The survey also explores what people are doing to mitigate the economic effects of the pandemic. Of those who reported a fall in earnings:

  • more than two thirds (68%) said they had reduced their spending
  • more than a quarter (26%) have used savings
  • significant numbers have taken a mortgage holiday (10%), borrowed from friends or family (10%) or applied for Universal Credit (7%).

This first look at the data was carried out by the team at Understanding Society.

Thomas Crossley, Associate Director for Scientific Content at Understanding Society says, “These new data show us that the economic shocks caused by the pandemic have affected people unevenly across the UK. The interviews will be repeated throughout the coming year with the same people to see how their experiences change, with new data publicly released after each wave to allow government and researchers to understand the pandemic’s long-term effects on people’s lives.

“We know from this first look at the data that twice as many people expect their financial situation to get worse as those who expect it to get better. This rises to three times as many in the lowest income bracket, and among single parents.3 So it is crucial to continue to track developments.”

Michaela Benzeval, the Director of Understanding Society, added, “Thanks to the ESRC’s long-term investment in Understanding Society, we have rich background information on these respondents from past annual waves of the Study. It will also be possible to track the long run impacts of the Covid-19 pandemic with their future regular annual interviews.”

Read the briefing paper on the economic effects of COVID-19 here.