New research has revealed four million children live in a family which has lost income since the start of the COVID-19 pandemic. Of those, 1.6 million children live in a family which has lost a third or more of its total household income, according to the findings.
The analysis, carried out by the University of Bristol and published today by Standard Life Foundation, finds over a quarter of UK families (27 per cent) are currently living on a reduced income as a direct result of a pandemic-related loss of earnings, compared with 17 per cent of households without children.
The findings show the drop in incomes is hitting families hard. Three million children in the UK now live in a family that is struggling to buy food and other essentials. On almost all indicators of financial hardship, the rate is doubled for families with children – compared to households without children. For example:
- Food and other necessities: One in five families (21%) - affecting around 3 million children - find it a constant struggle to buy food and other necessities,11% for households without children.
- Borrowing for essentials: Three in ten families (31%) - affecting around 4.5 million children - are using consumer credit to make ends meet, twice as many as households without children (15%).
- Housing arrears: More than one in 10 families (13%) - affecting around 1.8 million children - are behind with their rent or mortgage payments, which is almost three times as many as households without children (5%).
- Arears on other bills: Nearly two in ten families (16%) - affecting around 2.3 million children – are behind with electricity, gas, water, Council Tax or other bills, which is more than double the number of households without children (7%).
- Savings: Families with children are more likely to have no money at all in savings (34% with children vs. 21% without).
The research, commissioned by Standard Life Foundation, was conducted in January 2021 and analysed by the university's Personal Finance Research Centre. It is the fourth coronavirus financial impact tracker, a series of periodic cross-sectional surveys that examines household finances since the start of the pandemic.
As a result of the economic impact of the pandemic, families with dependent children are three times as likely as other households to have claimed Universal Credit since March 2020 (9 per cent of families vs. 3 per cent of households without children), and to still be claiming it in January 2021 (6 per cent vs. 2 per cent). This means about 1.2 million children live in families that have claimed Universal Credit because of the pandemic; 800,000 of whose parents are still claiming it.
