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In this report, we use a novel source of real-time data on households’ finances from Money Dashboard, a budgeting app, to explore the impacts of the crisis so far on earnings, incomes and financial distress, and how they are evolving. We complement this with household survey data to explain and verify the key trends.

This report examines how living standards – most commonly measured by households’ incomes – were changing in the UK up to approximately the eve of the current COVID-19 crisis, using the latest official household income data covering years up to 2018–19.

The lockdown in response to the Covid-19 pandemic has effectively shut down a number of sectors. We find that young people, women and low-earners are the most affected.

The Chancellor has introduced workable and generous income protection schemes for most employees and self-employed people that lose work as a result of coronavirus. But there are some groups who have seen no increase in protection.

The self-employed are more exposed to the large falls in demand resulting from social distancing measures during the coronavirus pandemic and more likely to be living in poverty than employees.

Over the past decade employment has grown very strongly, from 29 million to 33 million in work (70% and 76% of the working age population). At the same time wages have grown at historically slow rates.

There is a clear need to temporarily reallocate some workers but this should be balanced with the need to have the economy ready to quickly resume ‘business as usual’ once the COVID-19 crisis is over.

In this observation, we set out some of the most important facts about key workers to help inform the evolving policy response to COVID-19.

"Doing a degree on average adds significantly to earnings over a lifetime", Paul Johnson writes. But still, "we do not have an education and training system that provides...routes into good employment for enough young people."