Estimating poverty impacts of the coronavirus pandemic

Article

Unemployment is expected to rise across the UK later this year in the wake of the Covid-19 pandemic. Many households will experience significant falls in their income - and that will mean more people enduring poverty.

As a result of the pandemic, economic forecasters are expecting a huge surge in unemployment across the UK. And, as with other recessions, some workers may find they are working reduced hours. These economic shocks will have a profound impact on people’s livelihoods in the UK as incomes drop, even with the benefit system providing some income replacement in some cases.

This analysis uses a microsimulation approach to estimate potential poverty impacts from these changes in the economy, focusing on the last quarter of 2020 when unemployment is expected to peak and the Job Retention Scheme is due to end.

IPPR's research finds it highly plausible that over 1 million more people will be under the pre-Covid poverty line compared to a situation where the pandemic had not occurred, including 200,000 children, at the end of the year.

Our analysis suggests that the government will need to go further to prevent increases in child poverty - and much further in order to stem the rise in adult poverty – as a result of the crisis.

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