1. In the public health response to Covid-19, there's been lots of talk of behavioural science. When people isolate, will they get tired of being at home? But for many people this isn't about boredom. It’s an issue of affordability. (1/x)
2. The UK govt began to address this with good steps in the Budget (see: bbc.in/2U7rbew) - but that's just a start. Four groups are still particularly exposed. (a) c.2m people who earn too little to get sick pay (b) c.5m self-employed people, especially people... (2/x)
3. ...with low NI contributions (c.) around 7.4m over-indebted people (with big monthly debt repayments), and (d) people whose incomes barely cover their current costs, who are very exposed to higher energy/telecoms bills. (3/x)
These groups overlap; that's part of the issue. Many people face a combo of these things. And 7m people have no savings. This all means one thing: policies for financial security aren't additional to the public health response, they're *part* of the public health response. (4/x)
Thankfully there's *lots* the govt and businesses can do to help - here are some options. (5/x)
First, the govt can protect people's incomes. Start by widening eligibility for sick pay so that very low paid people can claim 80% of the normal rate - not much, but it will help. The UK govt had already planned to do this before Covid-19, so why not fasttrack this change. (6/x)
The govt could help low income self-employed people by scrapping the Minimum Income Floor for a year. They did this already for people who self-isolate - why not extend it to all self-employed people? It helps people who earn below c.£14,000 a year, so it's v well targeted (7/x)
The govt has already tweaked ESA, a sickness/disability benefit for low income people, so you can now claim from day 1 of an illness. That's good. But some people still can’t claim ESA - if they paid too little National Insurance. This condition could be waived for a year. (8/x)
Next, Universal Credit. It takes 5 weeks to get, so it's too slow for short-term help. The govt gives people loans to fill this gap but that leaves them in debt. For a year the govt could turn these loans into grants or they could pause repayments until the crisis ends. (9/x)
Housing is critical too. In a typical month, thousands of people are evicted by landlords or lenders and that could now rise. Clearly eviction makes self-isolation impossible. (Stats are here: bit.ly/2UcAutl - note they only cover cases that lead to legal action) (10/x)
For renters, the govt can do two things to help. First, they're already planning to scrap Section 21, an outdated rule that lets landlords evict tenants for no reason. They should fast track that and scrap it now. (11/x)
Second, the govt could pause even Section 8 evictions (e.g. for rent arrears) as a temporary emergency measure at the height of the epidemic. They could back this up with mortgage forbearance and interest support for landlords to avoid knock-on repossessions. (12/x)
Debt is another make or break area. Just as otherwise solvent businesses could go under, leaving economic scars, solvent families could too. Mortgage holidays are one tool to avoid this and all lenders should offer them. But... (13/x)
...other types of debt - hire purchase, payday loans - are used more by low income people, so these sectors must be flexible too. And there should be an industry-wide approach from credit reference agencies to avoid cutting off future credit to people hit by self-isolation (14/x)
Council Tax is the most common debt issue we see and in 7 weeks time, millions of bills will be sent out. Councils can do lots to relieve this pressure. And national govt could scrap a counterintuitive rule that says late payments trigger liability for the full annual bill (15/x)
Energy, broadband, & phone bills will rise as people stay home. To help with energy, the govt could repurpose the Cold Weather Payment for poor people who self-isolate. And as phone/broadband bills spike, companies should avoid disconnection/excess fees at all costs (16/x)
What's critical is that financial resilience forms part of the public health response. Given the hard realities of household finances, that inevitably means govt/big businesses shouldering an impact on behalf of struggling households. (END - Further refs below)
Our previous work on council tax debt is here - suspect this will become a big issue when annual bills land in a few weeks' time: citizensadvice.org.uk/about-us/polic…
This analysis of household budgets helps you appreciate low levels of financial resilience: citizensadvice.org.uk/about-us/polic…
There's a good wider @resfoundation briefing on UK govt's recent budget measures here: resolutionfoundation.org/publications/a…
Full briefing here with more detail on all these ideas: citizensadvice.org.uk/about-us/polic…
