Almost 700,000 pushed into poverty by Covid-19 crisis – think tank

Almost 700,000 people have fallen into poverty because of the coronavirus pandemic and its economic fall-out, analysis suggests.

There are an estimated 690,000 more people in poverty in the UK, compared to a situation where Covid-19 had not struck, according to a report from the Legatum Institute.

But Government action has halved the increase in poverty that would have otherwise occurred, the think tank said.

It estimates that a further 690,000 people have been prevented from falling into poverty by the temporary £20 a week increase in Universal Credit and working tax credits.

This uplift, and suspending the minimum income floor, has “insulated many families from the economic impacts of Covid-19”, the report found.

The report provides the first estimates of poverty this winter. It uses the Social Metrics Commission’s approach to measure poverty which the Government is currently using to develop and release experimental statistics.

Baroness Philippa Stroud, Legatum Institute chief executive, is calling for the Government to “urgently push ahead” with this work.

She said: “Given the well-documented impacts that the pandemic is having on jobs and earnings for families right across the UK, it comes as no surprise that poverty is rising.

“However, our analysis shows that, at a time of crisis, Government action can protect many of those who are vulnerable to poverty. But it needs to have the right tools and the right information at its disposal.

“To ensure this continues as we begin to adapt to life after, or living with, Covid-19, there is a clear need for a comprehensive anti-poverty strategy to be placed at the heart of the UK’s Covid-recovery response.”

The rise in poverty has been most prevalent among working-age adults, the analysis found, while benefit increases have meant some groups, such as single-parent families, have seen a fall in poverty.

The Legatum Institute said this suggests the impact on children may be more muted than anticipated, with a rise in poverty of an estimated 120,000 children.

Helen Barnard, director of the Joseph Rowntree Foundation, said of the Universal Credit uplift: “We should be proud of our country’s decision to protect those on the lowest incomes through our social security system – it’s the right thing to do.

“But it makes it all the more disappointing that the Chancellor has stayed silent on whether this lifeline will stay in place beyond April, leaving millions to wait out the winter in fear and uncertainty.

“There is no conceivable scenario in which this support will not be needed, and inaction risks a sharp rise in poverty.

“It’s not too late for the Chancellor to do the right thing,” she added.

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