The COVID-19 pandemic brought unprecedented disruptions to economies and livelihoods in the UK, exposing and exacerbating financial vulnerabilities across the population. This study develops a novel measure of financial difficulty using data from the Understanding Society COVID-19 survey. This multidimensional indicator incorporates data on income, bill arrears, reliance on borrowing, and subjective financial strain, providing a more comprehensive measure of financial hardship than traditional income-based metrics.

The paper investigates how financial difficulty during the pandemic varied across socio-demographic and economic groups in the UK. Multivariate analyses reveal significant disparities by age, gender, ethnicity, education, and employment status, alongside household composition. This research contributes to the growing literature on the social and economic consequences of COVID-19 by offering a more comprehensive understanding of financial difficulty. It also captures the importance of utilising available data to better capture the nuanced lived experiences of financial hardship.

The findings have implications for policy and practice, emphasizing the need for targeted interventions to mitigate financial vulnerability and support recovery, particularly among the most affected groups. By utilizing data from Understanding Society, this study demonstrates the value of household panel surveys in capturing dynamic and complex phenomena during crises and opens discussion on how the data can be used to create multidimensional measures for future policy evaluation and analysis.

This research aligns with themes of the Understanding Society Scientific Conference, contributing to discussions on innovations in survey methodology and their applications in longitudinal studies.

Co-authors

Dr Sarkis Manoukian; Professor John Holland McKendrick; Professor Olga Biosca, Glasgow Caledonian University