Covid pandemic making income inequality even worse in Britain, new research suggests

The coronavirus pandemic is worsening inequalities and making the poor poorer, new research has concluded.  

Researchers from University College London (UCL) found almost half of those who were already struggling financially before the lockdown said their situation was now “much worse”, and a further quarter said they were “worse” off as well.  

In contrast, only 20 per cent of individuals who reported they were financially comfortable pre-Covid feel they have become worse off, and 27 per cent even say they are now doing better.  

The lead author of the Covid-19 Social Study, Daisy Fancourt from UCL, said the research underlined how the lockdown was exacerbating existing inequality in Britain.  

“It’s clear that restrictions to halt the spread of Covid-19, while necessary, are having a damaging impact on people’s financial situations across the UK,” she said.

“What’s even more worrying is that this impact is not being felt evenly, and is widening existing social inequalities.”

The Covid-19 Social Study was launched the week before the first lockdown started, and has been following 70,000 people across Britain ever since, tracking their wellbeing, mental health and engagement with government advice and the lockdown.

Dr Fancourt said the latest findings should spur the government to be more generous in the financial support offered to both individuals and regions put under lockdown.  

“Going forwards, it is important that the government tackles this issue, ensuring that people are not financially penalised for following lockdown measures, that regions undergoing stricter lockdown measures receive the financial support they need to support those who are struggling financially, and that the divide is not allowed to increase further,” Dr Fancourt said.

There are regional differences visible in the responses to the study, with people from the North East of England, where Covid restrictions were particularly onerous prior to the nationwide lockdown, most likely to have been hit in the wallet by the pandemic.

Almost two-fifths (39 per cent) of those surveyed who lived in the North East said they were now worse off than before the first lockdown.

Cheryl Lloyd, education programme head at the Nuffield Foundation — which is funding the Covid-19 Social Study, said: "This report shows that the financial impact of the Covid-19 crisis is not being felt equally across the UK.  

“This threatens to further widen existing inequalities as the pandemic continues, especially in areas where the strictest Covid-19 restrictions have been in place the longest.”

The study also found compliance with lockdown rules had shot up since the second bout of nationwide restrictions was introduced.  

Those who claimed they followed every rule “completely” were just 26 per cent of the total when questioned in August, but that has now shot up to 47 per cent.  

Including those who said they were following most of the rules, 94 per cent of respondents were complying with the second lockdown, up from 89 per cent in August.