In a bid to prevent crisis the government introduced a number of measures to support people from the financial impact of the pandemic.

This support, which is set to come to an end this Autumn, included:

  • a ban on all evictions
  • a £20 weekly uplift to Universal Credit and working tax credit payments
  • suspension of the Minimum Income Floor for self-employed households in receipt of Universal Credit
  • the Self Employed Income Support Scheme (SEISS)
  • the Coronavirus Job Retention Scheme (CJRS)

Five changes to COVID-19 income support

  1. Self Employment Income Support Scheme (SEISS) and Coronavirus Job Retention Scheme (CJRS, more commonly known as furlough) will come to an end in September 2021. Currently, 11.6 million jobs have been furloughed and 2.3 million people are receiving SEISS.
  2. Minimum Income Floor will be reinstated at the end of August 2021
  3. £20 uplift to Universal Credit payments will end in September and October 2021, depending on your assessment period dates
  4. Some households are starting to be affected by end of grace periods protecting them from to the Minimum Income Floor and the benefit cap
  5. The end of the eviction ban took place in May 2021

The Office for Budget Responsibility (OBR) reduced their initial unemployment forecasts by 340,000, suggesting that despite income support measures coming to an end, the economy is opening up at the same time and the two should counter one another.

Source: OBR, Economic and fiscal outlook, March 2021

OBR reduced their initial unemployment forecasts by 340,000. Source: OBR, Economic and fiscal outlook, March 2021


However, the impact of the latest rise in Coronavirus cases calls this into question and the OECD predicts that the greatest economic shock in the UK is yet to come. They predict that the UK economy will face greater economic damage than other G7 nations because of the combined impact of COVID-19 and Brexit.

Families will begin to feel these economic shockwaves as the coronavirus support schemes come to an end and grace periods for some of the most restrictive measures within Universal Credit end. For households affected this will be a significant income shock.

The income shock will be significant

For households facing redundancy following the removal of the Coronavirus Job Retention Scheme and the Self Employed Income Support Scheme, the income shock will be huge. These households can currently receive up to £2,500 per month, so a couple could be receiving £5,000 per month.

The move to Universal Credit will see a substantial drop in household income as means-tested benefits are at their lowest historic level at only 12-18% of average earnings. These households will also be new to the benefit system, possibly never having claimed before, which will further complicate their access to the welfare system, a system that can be notoriously difficult to navigate for first-time claimants.

We also know that debt is rising. Our analysis of Council Tax Reduction shows that those moving onto Universal Credit for the first time are starting benefits with higher debt. This reflects both the time taken to navigate the benefit system and delay in application.

Debt and lack of savings were barriers before the pandemic, with many households unprepared for income shock that COVID-19 brought. At the start of 2020:

  • 44% of those in debt found it burdensome
  • 41% of households don’t have enough savings to live for a month without income

As the impact of COVID-19 becomes more apparent on a household’s financial resilience, Citizens Advice estimates that:

  • 7.3 million UK adults were behind on their household bills
  • 1 in 3 households have lost income because of coronavirus
  • 36% of people who have lost income have run down their savings
  • 45% of people with children have lost household income

Policy in Practice helps frontline organisations to prevent crisis

The benefit system is complex and confusing for people to understand. Some households just need up-to-date information, some will need support as they face income shock, whilst more still will need support around homelessness and debt.

The role of front-line organisations is more important than ever before as they can offer holistic support to their residents and prevent them from falling into crisis.

At Policy in Practice we can help local authorities to offer this wrap-around, holistic support through our Benefit and Budgeting Calculator and Low Income Family Tracker (LIFT) platform.

  • The Benefit and Budgeting Calculator gives advisors information they can trust. They can easily explain complex benefit changes and give people the advice they need to make decisions.
  • The LIFT platform shows how individual households are impacted by policy changes, now and in the future. The information can be used to identify the most vulnerable families, target support to them, and track the change.

How Redbridge Council is preparing for the end of COVID-19 support

The importance of immediate support to prevent crisis from occurring can not be overlooked.

Redbridge Council is one of a number of local authorities who are leading the way by using their administrative data to identify vulnerability and target holistic, preventative support where it is most needed in order to reach residents before they hit a crisis point.

The Welfare Benefit team, employment support team Work Redbridge, and the housing team have all been working together to offer inter-departmental, holistic support to their residents.

  • The Welfare Benefit Team administers timely payments of Housing Benefit, Council Tax Reduction and debt recovery including housing benefit overpayments. So far, this year, they have maximised their resident’s income by £500,000
  • The Work Redbridge team helps people back into work and feeds back into the local economy by supporting the employment of residents. Work Redbridge has supported over 800 residents, helping 260 people into work and a further 89 into training or education
  • The Housing team works to prevent at-risk people from falling further into financial crisis by awarding discretionary housing payments. This year, the Housing Team has worked with 2,487 households to prevent them from becoming homeless

Recent studies have shown that the more in financial crisis a person is, the less likely they are able to engage with employment support. Redbridge’s approach is fundamental in combating this issue as the three teams work in unison with one another to help a person reach financial stability, thus providing a much stronger foundation to work towards employment and benefit support. The importance of this immediate prevention work will be vital as we begin to see the full extent of the financial repercussions the pandemic created.

There are other opportunities for councils to prevent crisis

Councils are realising they can do more with data. The Department for Work and Pensions is making moves to share more Universal Credit data with councils and Policy in Practice is starting to work with full Universal Credit datasets to provide insights to councils for their immediate action. This approach will be hugely beneficial in tackling poverty and preventing crisis; timely analysis of Universal Credit data has the potential to unlock key insights to help better targeting of support, at the right time.

We are also seeing a revival of the job market and councils are well placed to assist households to work with their employment support schemes and help people access employment.

To make the most of these opportunities, the importance of fast and immediate support to help people navigate and prevent crises cannot be overstated and frontline organisations are the key to this success.

Hear directly from Redbridge Council about their use of data

To hear directly from Redbridge Council about the innovative work they are doing with their data to prevent crisis join us on Wednesday 21 July for our free webinar Back to normal: coping when Covid-19 welfare support is withdrawn. Details and registration here

Register for an upcoming webinar

TitleDateStart TimeDurationRegister
How Autumn’s income shocks will hit low income families The factors that have kept many low-income families out of poverty in the past year are changing, meaning many thousands will be worse off.

Families are set to be hit by big income shocks with the ending of furlough, the reintroduction of the Minimum Income Floor, the loss of the £20 a week Universal Credit increase and the ending of the Benefit Cap's grace period. New data analysis from Policy in Practice predicts significant losses for some families who will struggle to cope and who will need the support of frontline organisations to help them through.

In this webinar we will explore what the Autumn may bring for low-income households and how support organisations can work now to prevent hardship and prepare for an increased demand for services.

Join this webinar to learn:

- How much different households are set to lose when Covid supports are withdrawn
- What support tools are available for individuals and organisations
- Best practice advice from a frontline organisation

We will be joined by Monica Kaur from the Money and Pensions Service.
29/9/202110:30 BST1.3 hours
How Kent County and district councils collaborate with data to tackle poverty Covid has turned our world upside down. Many residents in Kent, as elsewhere, have experienced financial hardship whilst, for organisations, the pandemic has been the catalyst energising them to work differently.

In summer 2020 Kent Districts and Communities Recovery Cell set up a group to focus support to residents at risk or already experiencing financial hardship because of the pandemic. Residents unused to facing financial hardship suddenly needed help to navigate support and advice systems. The group knew that things are likely to get worse for Kent's residents before they get better as furlough ends and families who were just about managing are tipped over the edge.

In a first for local government, Kent county and district councils have boldly chosen to collaboratively share their data to get powerful cross-county insights that will drive their poverty prevention activity. The information will help them to target of a wide range of campaigns to residents such as employment support, free school meal take-up, public health interventions, housing initiatives and benefits take up.

Importantly, the project has transparency built in so that councils can very easily benchmark with each other to identify and share best practice in a safe, collaborative way.

Join this webinar to hear:

- Kent County Council's vision for greater collaborative working with districts
- Maidstone District Council's drivers for districts to collaborate with their data
- Folkestone and Hythe District Council's impact achieved so far from data-led poverty prevention campaigns

We will be joined by guest speakers, Zena Cooke, Corporate Director Finance at Kent County Council, Steve McGinnes, Director of Mid Kent Services at Maidstone District Council, and Jane Worrel, Revenues and Benefits Senior Specialist at Folkestone and Hythe District Council.
20/10/202110:30 BST1.3 hours
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