Covid-19: Impact on People Living in Poverty

Policies to tackle the impact of Covid-19 on those living in poverty is explored in this briefing.

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In its latest statistical outlook, the Department for Work and Pensions reports that the overall rate of absolute low income in the United Kingdom—which is measured on the basis of income after housing costs—was 20 percent in 2018/19. It was estimated this amounted to 12.9 million individuals.

Organisations such as the Joseph Rowntree Foundation contend that the Covid-19 pandemic could cause more people to live in poverty, with unemployment increasing. Charities have also noted an increasing number of applications for universal credit and concerns over food security.

The Government has introduced measures to help businesses retain employees and to help individuals with their income. These include: 

  • The coronavirus job retention scheme, which allows employers to apply for a grant that covers 80 percent of an employee’s monthly wage (up to £2,500 a month), and the self-employment income support scheme, which allows self-employed people to claim a taxable grant worth 80 percent of trading profits (up to a maximum of £2,500 a month).
  • Changing the terms of statutory sick pay for those suffering or self-isolating from Covid-19. The new terms allow an employee to claim statutory sick pay from the first day of an absence.
  • Measures to support those affected by Covid-19 to access the welfare system, including increasing the rate of universal credit and providing access to the new style employment and support allowance.
  • Additional funding for schools, who are expected to continue providing free school meals (in the form of vouchers) to eligible pupils.
  • The creation of a hardship fund to provide council tax relief to vulnerable people and those affected by Covid-19. In addition, on 8 April 2020, the Chancellor of the Exchequer, Rishi Sunak, announced a £750 million fund for frontline charities to continue their work in supporting vulnerable people.

On 30 April 2020, Baroness Bennett of Manor Castle (Green Party) is due to ask Her Majesty’s Government “what assessment they have made of the number of people who will be (1) living in poverty, or (2) unable to meet their basic needs, as a result of Covid-19; and what steps they are taking to support such people”.

  • Lords Research Briefing LLN-2020-0093
  • Author: Eren Waitzman
  • Topics: Coronavirus, Economy

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