The report examines how household incomes were changing in the UK before Covid, and how living standards have changed during the pandemic. Our data is used in the chapter on financial difficulties and deprivation, and shows that “despite the huge changes in the economy and society over the last year, on most of the measures there has not been a dramatic change in the proportion of people facing deprivation over the course of the pandemic”.
Loss of work
The IFS analysis divides people in poverty into those who were living in a household with at least one worker before the pandemic, and those who lived in a workless household.
At the beginning of the pandemic, there was a much greater increase in the number low-income working households who said they’d fallen behind on their bills – from 9% before Covid to 21% in April/May 2020 – compared to workless households (26% v 28%). However, by early 2021, the number of poor working households behind on their bills had fallen back to 10%, similar to its pre-pandemic level.
Other groups
The research also looked at differences between different age groups, and different ethnic groups.
There was little evidence of increased deprivation for younger groups compared with older working-age people – in fact, the number of 18-24-year-olds in households that used a food bank fell, even though this age group saw employment falling.
Younger people may have been sheltered from financial difficulties by living with their parents, moving back in with their parents, or the furlough scheme. People aged 65 and over had fewer spending opportunities during the pandemic and pension income which was largely unaffected.
Looking at ethnicity, about 5% of white adults were behind on their bills before the pandemic, compared to 12% of ethnic minorities. By April/May 2020, the figure for white people had barely changed, but for ethnic minorities it had risen to 21%. By March 2021, 15% of adults from ethnic minorities were in arrears on at least one household bill, still higher than before Covid.
Covid 19Income and expenditureMoney and finances
