Lockdown pays off for higher-earning families

NEARLY two million households will emerge from lockdown better off, a report from an influential think tank has found.

Around two-fifths of high-income, working-age families have strengthened their household budgets since the coronavirus crisis began, the Resolution Foundation said.

The Foundation called it a “big divide” as it said that just one in eight of those in the lowest fifth of earners had been able to do the same.

The Resolution Foundation said that its findings showed that 3.4 million adults lived in households, in the top fifth for income, whose budgets had strengthened.

Analysis by The Daily Telegraph suggested this equated to just over 1.6million households.

More than half of the richest fifth have been able to reduce their spending compared to just a third of the poorest households, the report, which drew on a survey of 6,000 people carried out in May, said.

The report, called Return to Spender, stated that “in normal times” a fall in spending would be interpreted as indicative of a decline in earnings, but that in this case it appeared to be driven by an “inability to spend money” as leisure outlets have been closed. It added: “If so, then, for many families, especially the better off, falls in spending reflect ‘enforced saving’, rather than being driven by falls in income.”

Harriett Baldwin, the Conservative MP, said: “I do hope households where they’ve got more disposable income recognise it’s good to plough that back into the local economy.”

The report comes on the same day that Stepchange, the debt charity, warned that a “tsunami” of £6 billion of additional debt has been stored up during the pandemic. The charity estimated that 4.6 million people have been negatively affected, with those earning less than £30,000 particularly likely to have fallen behind on payments or borrowed to make ends meet.