Before the pandemic, it was already clear that higher national levels of financial inequality are linked to higher prevalence of mental health problems. As countries become wealthier but remain unequal, rates of mental health problems are increasing. This is a major risk for the UK government to consider as the recovery from the pandemic begins. We can expect the financial inequalities that lead to higher prevalence and uneven distribution of mental illness to intensify, with not everyone reaping the benefits of recovery equally. We need to see immediate and concerted evidence-based policy action to address this. We recommend the following actions:
As a first step, the Universal Credit advance should immediately be converted into a grant, eliminating the current requirement to pay it back within 12 months. For the duration of the pandemic and subsequent economic downturn, this grant must be awarded to all applicants, regardless of their circumstances. In the medium term, the Government should convene a working group of experts to consider the learning from the Covid-19 crisis and develop proposals to reduce economic insecurity in the long term.
Addressing the debt crisis
Many households will face a financial cliff unless urgent action is taken on debt. According to the Office for National Statistics, the average UK household credit card and personal loan debt in 2019 was £9,400. It is important to note that the poorest households have the highest debt-to-income ratio. This means that households will not be in a position to borrow their way out of this crisis; substituting wages for loan debt will only make people’s finances worse, given the economic uncertainty in the medium and long term.
The government and all private sector providers must pause all debt collection, sheriff visits, interest accrual on debt, and deductions from benefits during the pandemic. This will provide a degree of security for people who fall behind on their bills.
We are also calling on UK energy providers to immediately stop using debt collectors to recover unpaid bills and respect the agreement they have signed with the Government to help households during the pandemic.
Finally, with the support of the central government, local authorities must ensure that rent and municipal tax moratoriums are offered to those who need them.
Action on child poverty
The sharp increase in the use of food banks, particularly among families with children, is cause for real concern. Those who depended on community and school resources, such as breakfast clubs or grandparents to help with childcare, are suddenly left to fend for themselves. Spending more time at home means higher bills and fewer opportunities to buy affordable groceries. The government should temporarily increase Child Benefit, the children’s element of Universal Credit and Child Tax Credit Payments, to help low-income families weather the storm.
We also call for the removal of the two-child limit and the benefit limit to prevent households from falling further into poverty.
Poverty at work
The immediate priority must be to ensure economic security for all. However, research shows that more than half of people living in poverty now live in working families. Too many people are trapped in poverty by low wages, zero-hour contracts, and job insecurity. For too long, key workers like social care staff have been paid less than the real living wage. Governments across the UK must ensure that all key workers receive the real living wage. In the medium term, governments across the UK need to deliver on their commitments to tackle low pay across the board.
Prevent stress from eviction risk
The government should extend the current ban on evictions for at least another three months after the end of any lockdown period and keep this under review with the possibility of further extension.
Make sure business changes work for vulnerable customers
The government should monitor the measures that businesses are taking to support their vulnerable customers (including those with existing mental health problems) during the pandemic to ensure that these measures are effective.
Targeted outreach to people who are unemployed.
The Department for Work and Pensions must make free psychological support available to all unemployed people and inform them how they can access it.
Improve the infrastructure for social connection
National governments should provide a designated funding stream for local authorities to support community development initiatives, including peer support, to promote public mental health. This should be available to all communities and include specific initiatives for vulnerable communities.
A whole-of-government COVID-19 mental health response and recovery plan
The UK government and devolved governments should ensure an intergovernmental approach to mental health and reduce health inequalities during the COVID-19 crisis and in the recovery phase by drafting a comprehensive Mental Health Response Plan. the government for COVID-19.