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STG
In March this year, SVP published new research which showed a significant proportion of Irish society are facing a multitude of financial pressures due to the pandemic. This includes loss of income, increased household expenditure on basics, erosion of savings to meet ordinary living expenses, falling behind on bills and being forced to cut back on essentials like food, heating and electricity.
Data from a representative sample of 1026 adults that was collected by RED C polling company showed that 43 of the population reported experiencing at least one form of financial strain due to the Covid-19 pandemic with:
It finds that those who are experiencing the most adverse financial impacts are many of the groups that were vulnerable to poverty prior to the pandemic including low-income families with children, lone parents, renters, and people with disabilities. Covid-19 has added huge additional pressures to these groups as they navigated the practicalities of self-isolation and increased food and energy bills from being home.
For example, the research showed that over a third of one parent families had to cut back on heating or had fallen behind on bills, and 25 had cut back on food due to cost. Increased expenditure on basics is hitting low-income families with children harder as they coped with the additional financial pressures associated with school closures. For people unable to work due to illness or disability, 42 reported going without heating due to cost due to Covid-19, compared to 18 of people at work.
The data also shows warning signs of financial distress among tenants, with almost one-in-ten renters reporting that they have fallen behind on their rent and a quarter stating they were in arrears on other regular payments. It is SVP’s view that the current protections for tenants with Covid-19 related rent arrears are too narrowly defined, difficult to access and can be particularly challenging for vulnerable tenants to navigate.
The research shows that the financial impact of the pandemic is not felt evenly across the population. Of those who were finding it difficult to manage financially prior to the pandemic, 85 reported experiencing some form of financial strain due to Covid-19, compared to 21 of those who stated they were living comfortably prior to the pandemic. This group were also more likely to report a drop in income (51 compared to 25 of those living comfortably prior to the pandemic). Furthermore, of those who were finding it quite difficult or very difficult to manage prior to Covid-19, 49 were spending more on essentials compared to 35 of those who were living comfortably.
These findings point to a divergence in experience during lockdown, with those most vulnerable to financial strain and poverty feeling the brunt of the negative economic consequence of the pandemic.
While the Government policy response has mitigated significant income losses through the pandemic unemployment payment and wage subsidy schemes, this data shows that additional interventions for those most at risk of financial distress are needed to ensure the public health crisis is not followed by a deeper debt, homelessness and poverty crisis.
The pandemic has heightened and exposed long-term issues for people living on low incomes and in financial precarity. We now have an opportunity to build back better. We must bolster the financial resilience of households in Ireland by investing in our safety net and our social infrastructure.
