Researchers are to assess the impact social distancing and a move to a cashless society has had on the lives of those without access to credit and other banking services.

The Glasgow Caledonian University study will examine what effect the sudden difficulties in accessing support from family and friends, food banks, and responsible lenders, has had on the health and wellbeing of some of the most financially vulnerable people in Glasgow and London.

Volunteers will complete ‘financial diaries’, documenting all their incomings and outgoings over a six-month period, and will be regularly interviewed by the research team during 2021.

It builds on earlier innovative studies in Glasgow and London which explored the relationship between finances and health.

The COVID-19 research project, which has secured £320,000 from the Economic and Social Research Council, will be carried out by researchers from GCU’s internationally renowned Yunus Centre for Social Business and Health. Volunteers in the London boroughs of Southwark and Lambeth, as well as in Glasgow will also have their spending habits tracked.

Dr Olga Biosca, an expert on microcredit and health at GCU, said: “People on low incomes are amongst the hardest hit by COVID-19 and the social and economic measures put in place to combat it.

“Many were already living in precarious financial situations and the move towards a cashless society – brought on by social distancing and isolation – has made them particularly vulnerable.

“Handling disposable cash, often through frequent in-store purchases in small sums, involves increased exposure.

“Lockdown measures have also influenced the extent to which family support and community services can be accessed.”

The findings from the Glasgow and London study will be shared with policymakers and service providers across Scotland and England to help provide greater protection to those most in need.

Dr Biosca added: “Our research shows that those who are insolvent and financially-excluded supplement their finances through a variety of resources, most of them based on physical proximity – informal cash loans; saving pots such as money clubs and church; charities supporting individuals’ day-to-day expenses; loans from responsible lenders and even expensive debts with doorstep lenders.

“These coping strategies may be at stake or subject to effectiveness constraints due to the pandemic.

“Allowing voices from disadvantaged communities to be heard is vital to help policymakers looking to design appropriate financial and social safety nets to maintain health and wellbeing.”