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GRANTON Information Centre welfare rights advisers Elvira and Pui-Kei will be delivering an advice and information session tomorrow at Royston Wardieburn Community Centre.
Come along if you have any questions about debt/benefits or housing!
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COVID-19 is having a massive impact on household finances, with personal debts increasing. But some people are seeing their savings rise as their incomes remain unaffected and their spending has been curtailed, says a new financial inclusion monitor from the University of Birmingham and the University of Lincoln.
The research also shows that the impact of COVID-19 comes on top of poor economic performance in 2019 (a likely result of Brexit uncertainties). Economic growth was negative and in the fourth quarter of 2019 it was zero. Furthermore, unemployment, under-employment and zero-hour contracts had all increased in 2019, while wages had started to fall in real terms towards the end of that year and into early 2020.
The 2020 briefing, now in its eighth year, highlighted that even though strains on family budgets were there prior to the pandemic, the impact of COVID-19 on top of this situation looks set to be monumental.
From just March to May 2020, between one quarter and one third of jobs were furloughed, and from March to April that year there were 2 million more claims for Universal Credit than there had been in the same period in 2019. By the end of May 2020, 28 per cent of the population said that COVID-19 had had a direct negative effect on their income.
For some households the Job Retention (furlough) Scheme and the boost to Universal Credit have been incredibly important interventions to support people’s incomes. However, those on ‘legacy’ benefits, are not seeing the same level of income protection, leading to a two-tier benefit system.
Karen Rowlingson, Professor of Social Policy and a member of the Centre on Household Assets and Savings Management (CHASM) at the University of Birmingham, and co-author of the report said: “COVID-19 has had, and is likely to continue for some time to have, a devastating impact on UK household finances.
“But it is important to note that, even prior to the pandemic, family budgets and the UK’s economy more generally were already faltering in many ways, possibly as a result of Brexit-related uncertainties during 2019.”
“Our research shows these are extremely difficult times for the country and many within it. Some statistics reveal, however, that a significant minority of the population is unaffected, financially, by COVID-19 or, indeed, are somewhat better off financially as their incomes remain the same but their expenditure drops. Inequality is rising still further as a result.”
Other key findings of the report show:
Steve McKay, Distinguished Professor in Social Research from the University of Lincoln and a co-author of the report says: “COVID-19 has led to an increase in already high levels of anxiety about finances with an estimated 4.6 million people now in arrears on household commitments totalling around £6 billion.
“As the furlough scheme finishes at the end of October and the eviction ban on tenants has already ended we will see a further rise in personal debt and people losing their homes”
Download the Financial Inclusion Annual Monitoring Briefing Paper 2020.
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