March 2020 will be remembered as the month life changed overnight. But in fact the true reality and longevity of this change has been slow to dawn on us.
The pandemic has reminded us how interconnected we are. Yet, this does not mean that the burdens have been shouldered evenly. It was, and is, households already living in poverty that are most at risk of financial peril due to the COVID-19 restrictions.
Estimates are that 4.1 million people already in financial difficulty have seen a reduction in their income because of coronavirus and that peak unemployment will hit more than 18% in areas with the highest proportion of low paid jobs.
The right thing
When the coronavirus storm first struck household incomes the Government rightly acted swiftly and compassionately, throwing families a lifeline to help them stay afloat. It raised the standard allowance of Universal Credit and Working Tax Credit by £20 a week, which prevented a surge in poverty.
For the people we help at CAP, an extra £20 a week goes a long way. It allows them to put food on the table, top up the prepayment meter or replace school shoes that are falling apart.
The Institute for Fiscal Studies (IFS) reported in June that these temporary changes to benefits were the reason that households in the poorest fifth had not fallen further behind, despite having been hit the hardest in terms of earnings (losing £160 per month on average).
The end is coming
But this temporary increase is due to end in April 2021. Dropping the lifeline will slash the incomes of roughly 16 million people overnight, cutting them adrift while the storm is still raging, and with further turmoil ahead.
While April 2021 may seem a long way off still, (who else is not ready to think about Christmas?!), the prospect of losing that money is already playing on the minds of families living on a financial knife edge. One single mum of three CAP supported, told us,
“What happens when the coronavirus is over and they take back that money? I’m going to be back to square one. I see that they’re trying to help, but for families with children with disabilities, it’s been absolutely appalling. They don’t understand the circumstances of someone with additional needs. It’s really tough.”
This is an opportunity
While there will be no Autumn Budget this year, we expect the Secretary of State for Work and Pensions to annouce the planned benefit rates for 2021/22 in mid-November. This is a key opportunity to ensure this lifeline is maintained and also thrown to those on legacy benefits who were missed out in the Government’s initial response. Without it, 700,000 people will be pulled into poverty and half of the people we help at CAP are at risk of being in this group.
That’s why CAP has joined more than 60 other anti-poverty charities to call on the Government to #KeepTheLifeline. As we all look ahead to recovery, we need to acknowledge that we’re in this together. Our social security system will be vital to keep our society steady through the challenges ahead. This is our opportunity to choose to do the right thing: keep the lifeline and keep families afloat.
Add your support by signing the petition here to help people like CAP Client Darren who shares what losing the lifeline would mean for him in this video.