Yahoo Finance Almost one in four Brits' incomes still lower because of COVID-19
Almost one in four UK adults had a lower income in September than before the coronavirus hit, new figures show.
A study suggests average incomes only “marginally” improved as Britain emerged from its first nationwide lockdown, after taking a heavy hit as the pandemic first spread.
The Resolution Foundation research found 23% of working-age adults reported a lower income in September than in February. It marked only a slight improvement on the 27% figure seen between April and June.
“This reflects the fact that while economic activity resumed over the summer and furlough rates fell, unemployment has risen while significant income hits for the self-employed have persisted,” said the think tank’s latest report.
Three in 10 adults who have seen a sustained income hit said they could not afford basic items such as daily fresh fruit and vegetables or turning on the heating when needed.
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Within the poorest quarter of households, more than one in two adults said they had borrowed in recent months just to cover everyday costs such as housing and food.
“There is evidence that serious financial stress is building among a minority as the pandemic continues to dominate lives,” the report said.
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The study was based on an online YouGov survey of more than 6,000 people, and weighted to be representative of the UK. It painted a different picture for higher-earning households, however.
It found lower spending by many high-income adults amid the pandemic’s restrictions had left their finances in a better place than before the pandemic. 35% said their income had risen relative to spending in September, while only 25% reported the opposite.
Lower-income households were more than twice as likely to have seen their budgets deterioriate, according to the research.
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Karl Handscomb, a senior economist at the Resolution Foundation, said: “Government support has played a vital role in protecting family incomes during the initial economic shock from lockdown. But as the crisis has persisted, new divides have emerged in how families are coping financially with the crisis.”
He called for the government to extend a top-up to universal credit benefits, hiked by up to £20 a week as a temporary crisis measure earlier this year, beyond next March.
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