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Here we are now, nearly 11 months on from the UK’s first national lockdown, and in the grips of another. This means certain sectors remain closed and workers furloughed for weeks, if not months. With restrictions of some form in place for more than a year, there will have been an unprecedented period in which many workers have experienced lower pay or no work. This will have potentially long-lasting consequences for people’s health and wellbeing. The people most affected means that the pandemic continues to amplify existing inequalities in society.

The Health Foundation’s COVID-19 impact inquiry is currently exploring the pandemic’s implications for health and health inequalities in the UK. Reporting in summer 2021, the inquiry considers how people’s experience of the pandemic was influenced by their health and existing inequalities – exploring key areas of life including health, work and education. Looking beyond the direct health impact of the virus, it will also examine the likely effect of measures such as lockdown on people’s health and health inequalities.

This blog explores the consequences for the mental health and wellbeing of people who received lower pay during the period from March to September 2020 than they were receiving before the first lockdown. The analysis is based on an online survey of more than 6,000 adults aged 18–65 who were interviewed in the period 17–22 September 2020 (our methods are summarised in the box at the bottom of the page).

Overall, this survey estimates that compared to immediately before the pandemic, 13% of the working age population saw a reduction in their pay across every subsequent month up to September 2020. Of those who experienced this persistent decrease in pay, 21% have been furloughed, 23% have lost hours and a further 23% have lost their job.

Since September, there have been significant changes to the measures in place to tackle the pandemic, with two national lockdowns bookending a regional tier system of social and economic restrictions. While this blog only covers the period before the restrictions started to tighten once again in October, the trends identified are likely to have continued and to continue in the coming months.

Why does a sustained reduction in pay matter?

Less pay means less money for living costs such as food and rent, while lost employment is known to impair mental health. Negative employment experiences can also have varying implications for people’s mental health. Our previous analysis showed that furloughing seemed to mitigate some of the effects on people’s mental health in the short term. However, the effect of long-term furloughing may have worse consequences for people’s mental health due to prolonged uncertainty about employment.

It is easier for people to cope financially with a short period of lower pay or loss of work than a prolonged period. And the longer that someone is out of work the harder it tends to be for them to move back into work. This difficulty has been amplified by the pandemic, with some sectors such as hospitality being totally shut down as a result of restrictions.

Being in work provides health benefits of its own. We also know that without sufficient income, people’s health suffers. Firstly, previous research shows that those living in persistent poverty have an increased likelihood of worse health outcomes. Secondly, the long-term stress and anxiety of struggling to make ends meet can impact negatively on health (studies show that increased allostatic load is associated with multiple chronic diseases).

The ability of different households to deal with the same reduction in pay varies widely depending on underlying levels of financial resilience. The Resolution Foundation’s recent report (using the same YouGov survey) found that reductions in income between July and September 2020 were evenly distributed by household income. However, those with the lowest level of savings were the most likely to have to draw upon these reserves during this period.

How has the persistent decrease in pay affected people’s mental health and wellbeing?

Figure 1 shows the relationship between (self-reported) wellbeing and duration of lower pay during the pandemic. We compare the wellbeing of those who experienced a persistent decrease in pay from March to September, those whose pay decreased for at least 1 month, and those who have had the same (or higher) pay for all 7 months. For each of the wellbeing indicators, a sustained reduction in pay is associated with the worst outcomes.

Figure 1

The proportion of those with persistently lower pay reporting very low satisfaction or very low happiness was significantly higher than those with temporary loss of pay or no loss of pay at all. Those with persistently lower pay also had significantly worse wellbeing across all indicators than those experiencing no loss of pay. The persistently low paid were more than twice as likely to report very low satisfaction, very low happiness and feelings of worthlessness than those with no loss of pay.

Who is most likely to have been affected?

Figure 2 looks at who is most likely to have experienced lower pay than pre-pandemic levels across every month between March and September 2020.

Figure 2

Age clearly made a difference Both the youngest and oldest groups of those surveyed were significantly more likely than all other age groups to have had persistently lower pay, at 22% for those aged 18–24 and 18% for those aged 55–64.

Lower pay also hit lower income households harder. Looking at pre-pandemic income quintiles, people in families across the income distribution experienced sustained lower pay (11% in quintiles 2 to 5), but those living in households with the lowest income (quintile 1) have been affected the most (23%).


With tight restrictions now in place for at least the first part of 2021, the Universal Credit uplift of £20 per week still due to be reversed in April (despite strong opposition), and the furlough scheme set to finish at the end of April, those who have been feeling the squeeze during the pandemic seem likely to be struggling with financial pressures for some time. And current policy means those pressures are likely to get worse. People’s health and their financial circumstances are inextricably linked and trends to date suggest that people experiencing a prolonged economic decline are more likely to have poorer mental health and wellbeing. The unique societal shock caused by the pandemic means that measures for the post-pandemic recovery must focus as much on restoring mental health as restoring the economy.

Alex Eastaugh (@EastaughAlex) worked as an Assistant Analyst in the Healthy Lives team at the Health Foundation.

This blog features original Health Foundation analysis of data from an online YouGov survey, which was designed and commissioned by the Resolution Foundation in partnership with the Health Foundation.

The figures included in this blog have been analysed independently by the Health Foundation and do not represent the views of YouGov or the Resolution Foundation.

The survey was conducted between 17 and 22 September 2020, using an online interview with members of the YouGov Plc UK panel (made up of more than 800,000 individuals) who have agreed to take part. The total sample size was 6,061 adults, aged 18–65.

Those who didn’t answer the question (ie had an answer of ‘not applicable’, ‘prefer not to answer’ or ‘don’t know’) were not included in the analysis. Those who have been seeing a persistent reduction in pay were calculated using the question, ‘Thinking about the months after the coronavirus (COVID-19) outbreak started in the UK, did your weekly/monthly pay increase or decrease compared to your usual pay before coronavirus (COVID-19) started, or was it the same?’ and answered ‘Decreased a little’, ‘Decreased a lot’ or ‘Decreased to zero’ for every month from March to September. Those categorised as temporarily lower paid answered with one of these options at least once from March to September but not all, while those with same or higher pay never answered with these options.

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