Yahoo Finance Coronavirus: UK households living in poverty hit record high pre-pandemic
The impact of the coronavirus pandemic on UK households has been laid bare, a year on since the crisis started, but according to official data some were already struggling before COVID-19.
According to the Department for Work and Pensions (DWP) the number of Britons living in poverty hit a record high just before the onset of COVID-19.
A total of 14.5 million individuals were estimated to be in relative low income — below 60% of average household income — in the year to March 2020.
This was up slightly from 14.4 million the previous year, but a million higher than the equivalent figure 10 years ago in 2009/10.
In 2019/20, the number of children living in poverty also reached a record high, up year on year from 4.1 million to 4.3 million.
DWP's study also showed that 11% of households had no savings at all at the start of the pandemic. This rose to 31% among lone parents.
DWP figures indicate that half of families, and 84% of lone parents, had less than £1,500 ($2,065) in savings. A fifth had savings over £20,000.
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It said that the level of saving increased with age, with almost half of pensioner couples' savings exceeding £20,000.
The Family Resources survey, showed that singles living alone, who are of working age. had lower levels of saving than average, with 70% of men and 69% of women having either zero or less than £1,500 saved.
“These figures show just how exposed we were when the pandemic hit, one in ten people had no savings at all to fall back on, and half had £1,500 or less. This is far less than we need in our emergency savings accounts," said Sarah Coles, personal finance analyst at Hargreaves Lansdown.
Coles added: "Now, a year into the pandemic, there are an awful lot of people who have seen their threadbare savings eroded even further: one in three people have had to eat into their savings. However, one in four have had a chance to rebuild their cash balances."
She advises those whose incomes have been "resilient" to "take stock" to ensure that they have "3-6 months’ worth of essential expenses in a competitive easy access account," and to consider "tying up any additional savings" for the periods when they need it most, in order to get a better rate.
Additionally, 52% of working age adults said that they are in a pension scheme, compared to 51% a year earlier. That includes 75% of employees (49% in 2012/13) and 18% of the self-employed (19% in 2012/13).
Overall, the pension scheme participation rate was slightly lower for working-age women than working-age men in 2019 to 2020. 54% of all working-age men were contributing to a pension compared to 50% of working-age women.
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