Shadow chancellor Anneliese Dodds said the toxic cocktail of a lack of savings mixed with the economic downturn caused by coronavirus meant 2021 could spell “financial ruin” for many.
The Opposition party flagged that there are a host of looming deadlines – including the end of the eviction ban on January 11, mortgage holidays on the final day of January, and the extended furlough scheme on April 30 – which they said could spell disaster for British families.
The window for applying for Government-backed loan schemes is set to shut on March 31 and ministers plan to cut £20 per week from Universal Credit as of April 6, Labour said.
The party said its own analysis had shown the UK entered the pandemic with one of the lowest savings rates in the developed world, with data showing that UK households saved £3,055 less than the average across other economies in the G7 group of nations in 2019.
According to Labour, a quarter of families had less than £100 in savings when the Covid-19 pandemic hit.
The revelation comes as the impact of coronavirus restrictions was found to have cost more than 1.3 million jobs, while millions of self-employed people have been excluded from Treasury support since the crisis began.
Ms Dodds said: “The irresponsible decisions taken by the Conservatives over the last decade left many UK households without a penny in the bank going into this crisis.
“When Covid hit, they had nothing to fall back on – and now some are teetering on the brink of financial ruin as several Covid support cliff edges loom.
“The Chancellor’s chaotic, last-minute approach to this crisis plunged the UK into the worst downturn of any major economy, but it seems he hasn’t learned any lessons.
“Families up and down the country will continue to suffer if he doesn’t fix Britain’s broken safety net and tackle the root causes of income insecurity across our country.”
The shadow cabinet member’s warning came as Boris Johnson told the public that the “bitter economic consequences” of rules designed to control the spread of coronavirus meant more people would “continue to lose their jobs – through absolutely no fault of their own”.
In an article in the Telegraph, the Prime Minister vowed to “continue with our measures to help business and protect jobs and livelihoods” in the new year.