Single parent families to be hit hardest by Universal Credit cut

New numbers released by the society's 'The Nation's Nest Egg' report show that single parent households were the only household composition to experience a fall in savings in 2020.

A quarter (24%) said that their savings levels had decreased, whilst an additional 17% stated that they had no savings before or after the pandemic.

The report, conducted in partnership with the Centre for Economics and Business Research (CEBR), seeks to analyse consumers’ financial resilience, defined as their ability to withstand financial shocks, and how that impacts their behaviour.

The report’s findings reveal that single parents’ monthly average savings fell from £520 in 2018 to just £400 in 2020.

By contrast, households comprised of two or more adults were most likely to increase their savings pot throughout the pandemic, with monthly savings increasing to £1,530. Similarly, families which comprised of two adults and one or more children for the purpose of this study managed to save £1,500 on average, and single adults £1,010.

To make matters worse, those hit hardest by the effects of the pandemic are set to experience further shocks to their financial resilience, as the Government’s Universal Credit uplift scheme, introduced at the beginning of the pandemic to support those in financial need, is due to end on October 6.

This is expected to leave claimants as much as £1,040 worse off per year.

In a statement regarding the cut Tina Hughes, director of savings at Yorkshire Building Society, said: “The fact that single parents have seen their ability to save fall over the last two years means they could be hit hard in the event of a financial shock, such as an unexpected bill.

“For some of those that have struggled during the pandemic and are now confronted by a cut to universal credit, a record breaking jump in inflation in August and rising energy and food prices, the picture this winter is bleak.”

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