Distribution of Money within the Household and Current Social Security Issues for Couples in the UK

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This briefing by Marilyn Howard and Fran Bennett provides a detailed insight into how money is distributed in a household and the implications for those on social security and experiencing spousal abuse.

When it comes to dealing with money in the household, families have frequently been treated as a ‘black box’ by government. The argument is that it does not matter what the sources of household income are, or who receives them, as money is put together ‘all in one pot’

This is because it ignores the importance of who actually receives the income  which is more likely to lead to control over that income as well as the potential for unequal sharing of money. This can cause poverty at an individual level which is then not identified in government statistics on poverty. One study of EU countries showed higher gender imbalance in poverty when using individual not household measures. In another European study, assumptions of income pooling were thought to be unfounded in 30% of cases.

The most recent Poverty and Social Exclusion (PSE) survey ran from 2010/11 to 2014/15 looked at both individual and household data, found that:

• 54% of couples managed finances jointly;
• 24% of couple finances were managed by the woman (except partners’ personal spending); and
• 12% were managed by the male partner.
• In 6%, the woman was given an allowance for housekeeping.
• Male-managed systems may be more significant in cases of domestic abuse.

Overall the latest Poverty and Social Exclusion (PSE) survey found that inequalities between men and women in couples have been found, usually to the detriment of women, in particular in financial deprivation and lack of access to personal spending money.

• 18%  of households with housekeeping allowance and male-controlled systems in the most recent PSE study thought they were going without more than their partners (and no male respondents reported that either they or their partner went without items).
• Even in household where income was pooled together the PSE survey found that more women than men (23% and 17% respectively) felt they went without items to a greater extent than their partner.
• The European Union (EU) has developed individual deprivation indicators to measure differences in deprivation within households across the EU – though clearly this does not measure inequalities unless individuals are suffering deprivation and it may be that joint household items (e.g.  a car) are also unequally shared.

British survey of 4,000 adults found one in five experienced financial abuse (and that women were more likely to experience abuse than men). Some groups of women may be more vulnerable to economic abuse, such as those who are pregnant, disabled women, older women and women from some black and minority ethnic (BME) groups.

Since Covid we have seen a rise in UC claimants.  So far, there have been 3.7 million claims made to Universal Credit between 13 March and 8 October 2020. In the two weeks between 20 March 2020 and 2 April 2020 there were 1.1 million claims made to Universal Credit. This is more than 10 times the weekly average for the year to 12 March 2020 of 54,000 claims. The Universal Credit (UC) single payment creates an environment in which one partner can exert more power and control over the other as they are receiving the money so have control over how it is distributed within a household.  UC can in effect ‘set the scene for abuse’.

This briefing revisits the issues around Universal Credit and the single payment that were highlighted in a 2018 report written by Marilyn Howard in partnership with Women’s Budget Group, Surviving Economic Abuse and the End Violence Against Women Coalition. You can access the report Universal Credit and financial abuse: exploring the links here.