Overview

Families with dependent children have been badly hit by the pandemic. In January 2021, around three in ten UK families with children (27%) were currently living on a lower income than in February 2020, as a direct result of a pandemic-related loss of earnings – compared with 17% of households without children. Overall, around four million of the UK’s 14 million children live in a family that has a reduced household income because of the pandemic; and 1.6 million of these children live in a family that has lost a third or more of its total household income since February 2020.

The fact that families with children are badly affected by the pandemic’s economic impact, combined with low financial resilience, means many are finding it very difficult to manage financially – much more so than households without children. As a result, three million children in the UK live in a family that is struggling to buy food and other essentials; 4.5 million live in a family that is using consumer credit to make ends meet; and almost five million live in a family with no savings buffer.

In terms of family financial wellbeing, of UK households that are in serious financial difficulty, four in ten (40%) are families with dependent children – up from 37% in April 2020. Some families with children are much harder hit than others, though, and those bearing the brunt include single parents; families on lower incomes; families in rented homes; and families with a parent whose daily activities are limited a lot by ill health or disability.

Key findings

The  Tracker found that families with children have been hit harder financially by the Covid-19 pandemic than other groups. The results were stark:

• Three in ten UK families with children (27%) were currently living on a lower income than in February 2020, as a direct result of a pandemic-related loss of earnings – compared with 17% of households without children;
• Four million of the UK’s 14 million children live in a family that has a reduced household income because of the pandemic;
• 4.5 million live in a family that is using consumer credit to make ends meet;
• Four in ten households in serious financial difficulty are families with dependent children;
• Families with dependent children are three times as likely as other households to have claimed Universal Credit since March 2020.