Money and resources
There is a well-established link between money and resources and variations in health. Poverty in particular is associated with worse health outcomes, and this is especially the case for persistent poverty

£1,000
An increase in household income of this amount is associated with a 0.7 year increase in female healthy life expectancy.
32%
of people in the lowest income category report less than good health. For the highest income category the figure is 11%.
14.5 million
people in the UK live in poverty, equivalent to around 22% of the population.

Why money and resources matter for health

There is a strong relationship between money and resources (such as income or wealth) and health outcomes. In a market society, financial resources are a necessity for most areas of life, including those that influence a person’s health.

People in the bottom 40% of the income distribution are almost twice as likely to report poor health than those in the top 20%. Poverty in particular is associated with worse health outcomes, and this is especially the case for persistent poverty.

Explore the different ways in which money and resources can affect health outcomes below.

Financial or economic strain has been variously measured by reference to income or debt, but generally refers to financial pressure or inadequate financial resources. This may include debt or an inability to meet day-to-day living expenses. This financial strain can act as a source of stress for individuals, and has been described as one of the ‘hardships, demands, conflicts, and frustrations’ in life that can lead to a stress response and eventually harm physiological health.

The consequences of these stresses can also be amplified by insufficient financial resources to manage them. For example, caring for a relative with a long-term health condition can occur across the socio-economic distribution, but the consequences may be greater for those with either lower incomes or fewer flexibilities related to employment.

The persistence of financial strain matters for health, because those facing persistent financial strain endure worse outcomes than those facing intermittent strain. In addition, the damage caused by economic strain can accrue throughout life, lowering resistance to illness.

Poverty – defined as having inadequate resources to meet basic human needs – is associated with worse health outcomes. In childhood, poverty is associated with worse outcomes in infant mortality, low birthweight prevalence, obesity, asthma, tooth decay and accidental death. It is also associated with worse health outcomes in adulthood, such as premature mortality, diabetes and cardiovascular disease.

Poverty can affect health in the same way that different levels of income can lead to different health outcomes, but with poverty there is the additional difficulty of not having sufficient income to meet even basic human needs. The deprivation of necessities that sustain a basic standard of living affects health in several ways, including being unable to afford sufficient heating or a nutritionally adequate diet. Other factors that can directly harm health include low-quality housing and the lack of opportunity for social participation.

Poverty can also have psychosocial consequences that can eventually affect health, due to the stresses of living on a low income as discussed in more detail in the following section on financial strain as a source of stress.

There is also the potential for poverty to affect health through relative deprivation, which is the stress associated with lacking the goods, services and status of mainstream society. This can affect health, even if a basic standard of living is being met, by acting as a chronic source of stress that eventually manifests physiologically.

Research suggests that any exposure to poverty in childhood, compared with no experience of poverty, is associated with worse health outcomes. Persistent poverty is associated with even worse outcomes, such as obesity, mental ill health and long-term illness. The number of episodes of poverty accumulated over an individual’s life is also associated with worse health outcomes.

Explore trends and inequalities in poverty and persistent poverty

On average, people with a low income are more likely to engage in unhealthy behaviours, such as smoking, high alcohol consumption, inactivity, high calorie intake and not taking advantage of preventive health services.There is evidence of a ‘double jeopardy’ effect, whereby unhealthy behaviours compound the relationship between stress and ill health. The range of stressors associated with low income may encourage people to drink, smoke or reduce exercise to cope with these pressures.

There is also a link between the perceived permanence of income and healthier behaviours. There needs to be a perceived sustained improvement in prospects for adoption of healthier behaviours – a short-lived income boost seems insufficient. The financial cost of some activities or goods have also been found to be a recurrent barrier to healthier behaviours.

Having sufficient financial resources to cover the cost of living is an important determinant of health and wellbeing. The coronavirus (COVID-19) pandemic has had a major impact on people’s income, as many businesses were forced to close or cut staffing levels when various levels of restriction have been in place.

The government has provided emergency support to sustain people’s income in two ways:

  • increasing Universal Credit payments for lower income families
  • earnings replacement schemes, the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme, to prevent mass redundancy and maintain employees’ income.

What has been the overall impact of COVID-19 on income?

The main data sources used to estimate incomes operate with a considerable time lag. This means that historically consistent data on how the effect of the COVID-19 pandemic has influenced people’s income in 2020, relative to past years, will not be available for some time. These data sources also tend to capture a ‘snapshot’ of circumstances, averaging outcomes across a financial year. Instead, research on the impact of the pandemic on living standards has focused on surveys commissioned through polling companies and in some cases, modelling the effect of policy on measures of pre-pandemic income.

Survey evidence from the Resolution Foundation and supported by the Health Foundation found that between July and September 2020, 23% of working-age adults reported a lower income than in February 2020 and 8% reported that their income had fallen by a lot. The impact on overall inequalities in income has been relatively muted, however, as an increase in Universal Credit payments has boosted the incomes of the poorest families. Also, on average, those in the lower income quintiles are less exposed to labour market changes as fewer are in employment. 

From an earlier period of the pandemic, the NMG survey run by the Bank of England found that 28% of households reported a lower income in April 2020, while 57% reported lower spending. A different source of data, using real-time budgeting information and analysed by the Institute for Fiscal Studies, estimated an 8% reduction in median income in May 2020 relative to pre-pandemic levels. This overall impact is similar to modelled estimates of a 7% reduction in median household income using microsimulation methods, which is discussed in a paper by Mike Brewer and Iva Tasseva. The authors find a positive distributional impact relative to pre-crisis incomes, with those at the bottom end of the income distribution protected while employment losses reduced incomes of those towards the top of the income distribution.

What has been the overall impact of COVID-19 on poverty?

Despite the relatively muted impact of the pandemic on income inequality overall, there still appears to have been an impact on people’s hardship. The estimates from Brewer and Tasseva find that relative poverty in 2020 declined due to the fall in median income, but poverty against the previous year’s median increased by 2 percentage points. The former measure compares different households’ income at a given point in time, the latter measure is a better guide over the short run, particular when there are significant changes in incomes.

A survey by the Resolution Foundation and YouGov found that slightly over half of working-age adults in the bottom income quintile had borrowed finance to cover basic living costs, such as housing and food. Despite government support, other sources of evidence also identify further hardship, such as an increase in packages provided by food banks.

There is evidence of gaps in social security provision, which have grown more pronounced in recent years. This also applies to the new forms of support, such as the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme, large scale schemes that have been reliant on existing systems to reach many people, but with inevitable gaps in coverage. The Standard Life Foundation estimated that around three million working-age adults experienced a reduction in income and were not covered by government support. These were mainly self-employed people who did not meet the criteria to qualify for the Self-Employment Income Support Scheme. 

Despite the relatively muted impact of the pandemic on income inequality overall, there still appears to have been an impact on people’s hardship. The estimates from Brewer and Tasseva find that relative poverty in 2020 declined due to the fall in median income, but poverty against the previous year’s median increased by 2 percentage points. The former measure compares different households’ income at a given point in time, the latter measure is a better guide over the short run, particular when there are significant changes in incomes.

A survey by the Resolution Foundation and YouGov found that slightly over half of working-age adults in the bottom income quintile had borrowed finance to cover basic living costs, such as housing and food. Despite government support, other sources of evidence also identify further hardship, such as an increase in packages provided by food banks. 
There is evidence of gaps in social security provision, which have grown more pronounced in recent years. This also applies to the new forms of support, such as the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme, large scale schemes that have been reliant on existing systems to reach many people, but with inevitable gaps in coverage. The Standard Life Foundation estimated that around three million working-age adults experienced a reduction in income and were not covered by government support. These were mainly self-employed people who did not meet the criteria to qualify for the Self-Employment Income Support Scheme. 

Explore the relationship between money & resources and health

Analysis

Relationship between poverty and healthy life expectancy by neighbourhood

Analysis

At a neighbourhood level, healthy life expectancy is higher where the percentage of households...

Analysis

Relationship between poverty, age and health

Analysis

Poverty is associated with less than good health at each age group and more than twice as many...

Analysis

Relationship between income and healthy life expectancy by local authority

Analysis

Areas with a lower average income tend to have lower average healthy life expectancy. These areas...

Analysis

Relationship between income and healthy life expectancy by neighbourhood

Analysis

Women living in areas with higher average incomes have a higher healthy life expectancy.

Analysis

Relationship between income and health

Analysis

The share of people aged under 55 years living in the lowest income households and rating their...

Analysis

Relationship between living standards and health

Analysis

People reporting their health as less than good are more likely to lack a range of essential goods...

Explore subtopics within Money and resources
Persistent poverty
This relates to a person living in poverty for a prolonged period of time
Poverty
This relates to how poverty affects health
Income
This relates to the ways in which income affects health

Related long read

Long read

Living in poverty was bad for your health long before COVID-19

About 16 mins to read

Long read

COVID-19 has thrown inequalities in health and society into sharper focus. Adam Tinson explores the...

Featured analysis

Analysis

Trends in poverty

Analysis

The share of people living in poverty in the UK has remained at around 21–22% for the past 15 years....

Analysis

In-work poverty trends

Analysis

In-work poverty has been rising for the past two decades – 64% of children and working-age adults in...

Analysis

Inequalities in poverty

Analysis

There are considerable inequalities in exposure to poverty – single parents and some ethnic minority...

Analysis

Change in share of working-age adults receiving Universal Credit during the coronavirus pandemic by local authority

Analysis

There were large increases in the proportion of adults receiving Universal Credit during the...

Analysis

Trends in material deprivation

Analysis

The share of children living in households with severe low income and material deprivation has...

Analysis

Inequalities in persistent poverty

Analysis

Persistent poverty rates are much higher for renters, lower work intensity households and for people...

Explore the topics

What's new?

Money and resources

Work

Housing

alt=""

Transport

Neighbourhoods and surroundings

Coming soon

Family, friends and community

Coming soon

This is part of Evidence hub: What drives health inequalities?

Data, insights and analysis exploring how the circumstances in which we live shape our health