UK households have been worse affected by Covid-19 poverty than their counterparts in France and Germany, according to a cross-country comparison of the pandemic’s effects on inequality.
Brits faced a “far bigger living standards hit” than those in France and were more likely to rack up debt, despite being just as likely to have lost work in lockdown. Analysts said the UK’s “weaker” welfare system let people fall through the gaps.
A higher level of poverty prior to the pandemic and fewer people having substantial savings also left family finances less resilient to the economic shock of Covid-19 than in similarly wealthy European countries, despite average incomes being roughly the same.
One in three UK households (33 per cent) report having had to cut back their spending, compared to 22 per cent in France and 21 per cent in Germany.
“It’s vital that households’ financial position is strengthened as we finally emerge out of the Covid-19 crisis, so that they are less exposed when the next economic crisis comes along,” said Maja Gustafsson, an economist at the Resolution Foundation, which carried out the study.
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