A new study has found that people with protected characteristics are at greater risk of being charged more for essential services.
Over the past year, the COVID-19 pandemic has exposed deep-rooted inequalities in British society.
But while the crisis has shone a light on the the disproportionate health inequalities facing BAME communities, the financial cost has received significantly less attention. Earlier in January, research from The Institute for Fiscal Studies found that people on lower incomes, the young and people from BAME backgrounds were among the hardest hit by the crisis.
Now, new research carried out by Bristol University academics and the campaign group Fair by Design has found that BAME Britons are more likely to face a “poverty premium” through disproportionately high living costs.
The study found that while all people on low incomes were being charged extra for essential services such as electricity, gas and insurance, the costs were magnified for people with certain protected characteristics such as race, age and disability, as well as health, migration history, sex and religion.
The study suggests that those furthest away from financial inclusion are often hit by hidden costs when accessing basic services, such as insurance underwriting processes which consider them higher risk because of their location or health condition, or higher charges incurred by using prepaid meters rather than direct debit.
The findings also indicate that intersectionality has an impact upon the poverty premium, as the more protected characteristics a person has, the more likely they are to be in poverty.
The shadow equalities minister, Marsha de Cordova, told The Guardian that it was a “scandal” that minoritised groups were being charged more for essential services.
“The same groups are already being unequally impacted by this pandemic, facing higher death rates, higher unemployment rates and higher levels of poverty. Now we see creditors and corporations profiting from their precarity.
“The government is failing to uphold their duties set out in the Equality Act and to protect consumers from this kind of discrimination.”
The researchers behind the study have suggested that in order to work towards a more fair and equitable society, regulators and policymakers should directly address socio-economic inequalities, as originally laid out in the Equality Act. With people from BAME groups facing both an increased risk of poverty and disproportionate financial costs due to the pandemic, the need to tackle inequality is growing evermore critical.
“Covid-19 has thrown a light on links between insecure work, low incomes, and protected characteristics,” said Fair by Design’s director Martin Coppack. “But, even before the pandemic, some people were paying more for life’s essentials because of who they are, where they can afford to live, and the options they have when they have to pay for things.
“To level up our communities, regulators and policymakers should work together to make sure people on low incomes can access the products and services they need at a price they can afford.”
“Socio-economic inequality lies at the heart of much of our work at the Maya Centre, and we see this as a key exacerbator of stress for women, as well as the consequential links to poorer mental and physical health and higher risk of violence against women and girls (VAWG),” said the CEO of the Maya Centre, Emma Brech.
“We’re pleased to see intersectionality being openly addressed – but shocked by these findings which highlight the disproportionate impact on minoritised and low-income BAME groups. This makes us more determined than ever to continue offering free services to all women on low incomes and we are lucky to have funders on board who champion our holistic, inclusive and empowering approach to women’s wellbeing.”