Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/337433 
Year of Publication: 
2026
Series/Report no.: 
IFS Report
Publisher: 
Institute for Fiscal Studies (IFS), London
Abstract: 
The risk of a worker falling into unemployment represents one of the most important threats to the stability of households' finances - both in terms of lower spending (and hence living standards) and in terms of a greater degree of financial distress (such as the accumulation of unmanageable debt or missed bill payments). Providing households with some degree of insurance against these risks is a crucial function of benefit systems. However, relatively little is known about how spending and financial distress evolve following job loss in the UK and the role played by the benefit system - which, by international standards, provides comparatively little protection against unemployment, on average. Drawing on a dataset of anonymised bank account transactions, this report provides new evidence on how workers' finances respond to unemployment. Using a sample of more than 10,000 job losses occurring between 2018 and 2023, we trace changes to spending, credit usage and financial distress during unemployment, exploring how these responses vary according to the amount of support afforded by the benefit system.
Subjects: 
Consumption and prices
Employment and income
Government finances and spending
Poverty, inequality and social mobility
Taxes and benefits
Benefits
Consumer behaviour
Employment
Labour supply and workforce
Living standards
Methods
Universal credit
Working age benefits
Persistent Identifier of the first edition: 
ISBN: 
978-1-80103-241-4
Document Type: 
Research Report

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