Household income could drop by £1,000 for millions as Rishi Sunak’s support measures end | Personal Finance | Finance
[ad_1]
The impact of COVID-19 has been widespread, with many households struggling to reckon with more difficult financial circumstances. As lockdown was introduced, many businesses were forced to shutter, leaving their employees unable to work, or earning less than usual. The government made significant effort to help those affected by the crisis, by introducing a number of financial support measures.
Furlough and the Self-Employment Income Support Scheme were designed to provide individuals with 80 percent of their income, up to a particular threshold.
Millions have taken up both schemes, which have given assistance during a difficult financial time.
However, the measures are scheduled to draw to a close in October, with the government insisting they will not be extended.
Prime Minister Boris Johnson told the Evening Standard: “We’ve spent £120billion supporting people, it’s a huge commitment and we have put our arms around people.
READ MORE: Pensioners could lose thousands under proposed reform
Analysis from the think tank stated UK households have experienced the biggest immediate income shock since the mid-1970s.
The “COVID-induced economic crisis”, it said, has caused stagnation and a sharp blow to households across the country.
Typical working-age incomes, according to research, fell by 4.5 percent between 2019-20 and May.
It also drew attention to the increase in Universal Credit pledged by the government in the wake of COVID-19, which is also scheduled to end.
The increase in Universal Credit is set to be pulled in April 2021, which is likely to have a severe impact.
The Foundation has said this move will result in an income cut over over £1,000 for over six million households.
Universal Credit currently provides help to millions with the cost of living in the UK through regular payment support.
Adam Corlett, Senior Economist at the Resolution Foundation commented on the findings.
He said: “The phasing out of the Job Retention Scheme means much larger rises in unemployment are ahead of us, and these are likely to be concentrated among lower-income households.
“And withdrawing increases in Universal Credit next April, when this crisis will be far from over, will leave over six million households facing a further income loss of over £1,000.
“This initial phase of the crisis has shown us the importance of bold job support and a stronger social security safety net.
“The government should keep both those lessons front of mind as it navigates the next phase of the crisis.”
It is hoped the government will consider more support measures to help Britons through the continuing crisis.
[ad_2]
Source link
