Poverty in 2021 Britain

The coronavirus pandemic has been a huge financial challenge for many households. Some people felt that they had fallen into levels of poverty. However, it wasn’t all financial doom and gloom for everybody in Britain. Higher-income households were found to have benefited financially from the pandemic. They were forced to curb their spending habits and many people found that their financial status improved. Unfortunately, a large number of households were not so lucky. 

In December, a study from the Legatum Institute illustrated that more than 15% of the United Kingdom are in poverty. That is 23% of the UK population. The report says that 700,000 more people have been pushed into poverty as a result of the pandemic, and 9.6 million household incomes fall 25% or lower than the official poverty line. 

Many will also be experiencing problem debt. It was thought that 8.3 million people in the UK were over-indebted, while 22% of adults had less than £100 in savings. These figures show why millions of people were left vulnerable to the financial implications of Covid. 

Astonishingly, by May 2020, 4.6 million people had accumulated over £6-billion in debt and arrears. 

Astonishingly, by May 2020, 4.6 million people had accumulated over £6-billion in debt and arrears. 

Citizens Advice highlights that roughly 6 million adults have struggled to get on top of at least one household bill during the pandemic. Most people attending the Citizens Advice for debt advice are in debt to the public sector, not the private sector, with tax credit overpayments, benefit overpayments, council tax arrears, and utility providers, according to The Guardian’s research. 

The above suggests that debts are not related to excessive spending on goods. Analysis from Trussell Trust suggests that half of food bank users struggled to afford everyday necessities because they were repaying universal credit debts. 

Austerity has affected millions of individuals and the five-week wait for universal credit has done little to help those struggles. People are able to receive a loan or an “advance” on their benefits, but many end up in debt because it is not a grant. They repay these debts on a monthly basis, from their universal credit payments. This makes life incredibly difficult because the universal credit payments are already a very low amount of income for many. 

Many local communities have also felt the effects of austerity. Public services have been decimated because of the funding cuts. Less libraries, parks and sports facilities have contributed to a bigger financial burden for families. Many parents will feel the need to support their children both inside and outside of the classroom, especially if the state is not able to do so. It’s worth noting that the government has recently delivered over one million technological devices to disadvantaged pupils.

Poverty in the North West

Our interview with Mick demonstrates how individuals can end up in poverty. Addictions to alcohol and drugs can leave individuals in poverty. Their financial situation worsens as money begins to fund their addiction. Mick helps addicts to beat their addiction, using his own experiences as a guidance. We will look to work with Mick’s organisation, Church on the Street, to help addicts with their financial concerns.

Alongside our work with Mick, we will be bringing you more articles on financial education over the coming weeks. The pandemic has taught us that there are things you simply cannot anticipate happening so you have to always be prepared.

We believe that the sensible spending strategies some people have used during the pandemic can be implemented in future years. However, we also understand that those in poverty stricken situations will not necessarily be able to implement budgeting plans. Careful spending could cut down levels of poverty in the future.

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