Nearly 3.8 million consumers are excluded from the government’s income replacement schemes according to new analysis by Standard Life Foundation.

The figures indicate that 7 per cent of consumers have lost earnings as a direct result of the pandemic and have not been either furloughed or able to get help from the Self-Employment Income Support Scheme (SEISS). Nor are they claiming Universal Credit (UC).

Of these excluded people, 1.8 million have lost a third or more of their total household income. In addition to all of those excluded nearly two-thirds (63 per cent) struggle to pay bills. with 30 per cent (1.1 million) struggling to pay for food and other day-to-day essentials and a similar number have borrowed (using overdrafts/credit cards) to pay for food and essentials;

Three-quarters (73 per cent) say they feel anxious about their financial situation with nearly half (47 per cent) have used their savings to help them make ends

The data comes from a YouGov survey (Jan 2021) of around 6,000 people commissioned by Standard Life Foundation and analysed by a team from the Personal Finance Research Centre (University of Bristol).

Half of those excluded have ceased to earn an income, and half are on reduced earnings/income (but receiving no additional support from furlough/SEISS or UC). One-third (35%) were contract or agency workers, on zero-hours contracts or obtained work through online platforms (such as Uber and Deliveroo) – either as an employee or self-employed.

On 20th January the Public Accounts Committee gave the government six weeks to explain why such a significant number of struggling taxpayers were not receiving any support.

Mubin Haq, CEO of Standard Life Foundation, said “At the start of the pandemic the Chancellor promised workers they would be supported. Millions have but far too many, who’ve worked hard and paid their taxes, have been left high and dry. Too  many are struggling to pay for food and everyday essentials.”

“The system is full of cliff edges. No help for the self-employed who have earned more than £50,000 per year, but full support for those who earned just £1 less. And no support from the self-employment income support scheme for those who don’t earn a majority of their income from self-employment.”

“Current government support does not suit modern working styles. It needs to allow for people who have changed jobs, worked in part-time roles topped up with self-employment, and those whose earnings have not been consistent. Those who were self-employed and have taken time out to care for others have been particularly affected.”

“It’s not too late for the government to sort out this situation. It’s complicated but that does not mean more cannot be done to help those excluded.”

Today’s figures follow the Foundation’s finding in July 2020 which showed nearly three million families were not supported by the income replacement schemes (and of those, 90% did not qualify or apply for Universal Credit). The research is part of a series that has been tracking the financial impact of coronavirus on UK households’ incomes since March 2020. Further research, including a full report on January’s findings, will be released next month.