4. Household resources and finances
This chapter looks at how participants managed financially during the pandemic, the associated challenges they faced and the support or other factors that helped them cope. It also notes participants' suggestions about how things might have been done differently.
- Participants who were struggling financially before the pandemic went into it with few buffers against its economic consequences.
- Overall, participants tended to think that the benefit-related responses which had been put in place had worked well and had generally been an appropriate response to the crisis. The additional money made available during the pandemic was much appreciated and had certainly made a difference.
- Nevertheless, participants often thought that in general their family was having to manage on insufficient resources. This related to standard benefit levels and the amount they were managing on pre-COVID and would be managing on going forward.
- Accessing food could be challenging, particularly in the first lockdown. COVID related or enforced changes in shopping habits had often led to higher food bills. Lone parents, and those with a disabled or vulnerable family member, were most likely to be affected.
- Support designed to replace free school meals was considered very helpful but there was a strong preference for the direct payment solutions that had been put in place later in the pandemic.
- Many participants had accessed advice and practical support from food banks, community and specialist third sector organisations. This type of support was hugely valued, both in terms of the often targeted type of support received but also the flexible and responsive way in which it was delivered.
- The Universal Credit £20 uplift and furlough were the most mentioned and appreciated sources of financial support. Many participants were concerned about the loss of this £20 uplift, particularly with increasing food and energy costs squeezing already tight household budgets.
- There was appreciation of, though less clarity about, the variety of one-off COVID payments that many participants had received. Participants often associated these with free school meal entitlement, but often could not recall the name, purpose or timing of particular payments.
COVID-related changes and challenges
Pre-pandemic financial situation
Among participants that lived in working households, some had experienced periods of financial hardship before and during the pandemic, largely as a result of fluctuations in earnings and hours worked. Others had fallen into financial hardship for the first time, or the first time in many years, after the onset of the pandemic.
In terms of those who lived in households where no-one was in paid work, or only one person worked part-time on the eve of the pandemic, most said they had been able to 'get by' on the state benefit income they received. However, some had struggled financially and had significant debts on the eve of the pandemic. Single person households, lone parents and/or young parents were the most likely to report that prior to the pandemic they had struggled financially and were in debt.
You read all that stuff about folks eating out of their cupboards and I thought ... ay right ... well there's plenty stuff in your cupboards but in mine there isnae.
Couple with three children.
Urban area with substantial rural areas.
For most participants, the experience of dealing with the challenges created by the COVID pandemic came on top of the realities of living on a low income. Going into the first lockdown, participants often said they had no meaningful reserves of money, food, or other household essentials to draw on, even for a short period. This was true for both households where someone was in employment, and those where no-one was. Again, couples and single people without children were most likely to indicate they lack any reserves, which they tended to associate with the levels of Universal Credit they received.
It's so little to live off. Even if you buy one nicer thing for yourself you know you're going to be regretting it for the rest of the month because you're worse off.
Mainly rural area.
Significant reduction in amount of money coming in
Some households had experienced a considerable reduction in their income for some or all of the pandemic. This was generally because of:
- The loss of paid work or a reduction in hours worked. This group included employees and self-employed, some of whom reported having moved from moderate financial hardship to serious or severe financial hardship since the start of the pandemic.
- Being furloughed for prolonged periods without their employer topping up payments to 100% of their pre-COVID salary. Although the drop in income was typically less than for those who lost paid work, it was nevertheless sometimes enough to move people into moderate or serious financial hardship.
- Relationship breakdown, especially when the former partner had been in paid employment. In some instance the change in financial circumstances was sufficient to move a participant's household from not being on a low income straight into serious or severe financial hardship.
There were no distinct area-related patterns in terms of the households most likely to see a significant reduction in income.
In some cases, the reduction in household income had been short-term, either because their hours had been restored or they had found new employment.
Others had been adjusting to what they felt would be a longer-term period on a low income. Lone parents were the most likely to believe this would be the case. This was primarily because childcare responsibilities limited they type of work they could pursue. In particular, those seeking to re-enter employment expressed concerns about being able to find working hours that would fit around their childcare needs.
Setting up a new home
Participants spoke of specific challenges associated with moving house just prior to or during the pandemic. They included:
- Young parents, including those with babies or very young children. Some had recently moved into their first home of their own or were about to do so
- Lone parents who had recently been through a relationship breakdown that had resulted in them moving home.
They often did not have many of the household essentials, including furniture, white goods or money for floor coverings. They included families who had no option but to leave many of their personal possessions, including clothes and toys, behind when leaving an abusive relationship.
Getting food and other essentials
For many participants, the most immediate and pressing challenge they faced, especially during the first lockdown, was to ensure their family had the food and other essentials they needed.
Almost everyone said that their food bills had increased, particularly during the periods of lockdown. At its simplest, being at home more, and especially having children home from school or nursery, meant households were consuming much more food. In particular, participants said that being at home all day, and the boredom which came with that, often meant they or their children were eating more frequently.
... we were going through it like wildfire because they were at home all day ... we were having to feed them at home and because they're bored they'll eat and eat and eat and eat. Every two minutes it was – I'm hungry ... we have a good friend that drives, and she basically saved our bacon as well. She went out and got a whole load of the yellow ticket stuff from one of the bigger supermarkets – that was a godsend ... we would really have struggled otherwise.
Couple with two children.
A range of challenges in accessing and paying for food often came together to present some households with significant difficulties. These challenges were reported irrespective of household composition or geography but had the most impact on participants experiencing severe financial hardship.
Supply issues: Participants noted the shortage of basic staples to purchase, such as bread, milk and pasta, with some having had to buy more expensive substitute products. They also referred to price increases since the start of the first lockdown and that bulk buying was the preserve of those who had spare resources.
In addition to general food issues, participants also referred to difficulties sourcing:
- Foods that met dietary requirements, including religious requirements or because someone in the household has food allergies.
- Baby milk, which was compounded by the fact that it was not possible to simply switch brands depending on what was available. Some participants had turned to making expensive online purchases or getting their family and friends to scour local shops for the necessary supplies.
- Medical supplies or health-related products for adults and children with a disability or medical condition, such as dressings and sterilising fluid.
Supply issues were at their most acute at the start of the first lockdown. Participants living in rural, and particularly remote rural or island communities were most likely to report severe problems. However, these supply problems extended across urban and rural Scotland. After the first lockdown, these problems eased, other than the occasional report of shortages during the second lockdown.
Difficulties with going to the shops: Practical challenges and anxieties about going to shops saw more participants shift to booking supermarket deliveries. Delivery charges, and the inability to shop around, often had a significant impact on their food spend. Some participants also reported that the supermarkets they usually used did not have a delivery service and that they found the supermarkets that would deliver to be more expensive.
… my husband found out that he had epilepsy and was unwell, and I don't drive, so being able to actually physically get to the shops was problematic at times, so I was having to get a delivery, and by doing an online delivery you are restricted in what shops you can use. I felt that my food bills were more expensive because I was getting my stuff from [name of usual supermarket].
Couple with three children.
These same anxieties or practical challenges, plus difficulties securing delivery slots, meant that some participants fell back on smaller, local shops, which again were often found to be more expensive.
These types of issues were common across a range of households, but lone parents with more than one child and households with a family member that was disabled or had significant health issues were most likely to have found standard, supermarket type shopping most difficult. This was due to various challenges, such as concerns around getting to and from the shops and the potential need to queue for long periods and exposure to COVID.
Food was more expensive, me having anxiety wasn't great in the sense of I wouldn't go into town ... it didn't matter about the queueing system ... everybody was touching stuff, so I couldn't face a supermarket, which meant I was buying from [name of local store], which was more expensive. They were regularly without bread, they were regularly without everything.
Lone parent, two children including a new baby.
Mainly rural area.
Many participants had returned to their pre-COVID shopping habits by the time of interview. However, a small number said that they remained anxious about shopping, particularly visiting supermarkets, and continued to shop online and have food delivered.
Ongoing price increases: Over and above reports of continuing to shop online and of not feeling able to shop around, many participants felt that their food spend remained higher than it had been before the first lockdown. Children returning to school or nursery, and adults being out of the home more, may have reduced the amount of food being purchased, but that has balanced out against increased prices. This was a common experience, and a concern for all, but was of greatest concern to participants experiencing serious or severe financial hardship.
Just as participants had seen increases in the cost of food and other essentials, their energy costs had often also risen, in some cases sharply, and especially during the periods of lockdown.
For some, this had translated into gas or electricity accounts being in arrears, including sometimes at considerable levels. There were also a small number of concerns that having taken payment holidays, this money would still need to be found and paid back.
We're still in arrears with the electric, about £700. I'm trying to get that down but with the cost of everything at the moment ... the kids were home constantly, everything was on – lights, chargers. It goes up so quickly. They gave a month's payment holiday which means having to catch up with that now too.
Couple with three children.
Urban area with substantial rural areas.
As with food costs, concerns about energy costs were ongoing at the time of interview, and a number of participants referred to their worries about rising prices over the winter of 2021/22. Again, this was a common experience, and a concern for all, but was a particular concern for parents with younger children, especially babies, and those households with a disabled family member or a family member with a chronic health condition. These concerns were generally about having limited, if any, capacity to reduce consumption, with having a warm home fundamental to keeping vulnerable family members safe and well.
Digital communication costs
Before the lockdown, most participants already had a broadband or mobile package that was sufficient for their needs, including during the periods of lockdown and to support home schooling or working from home.
There were, however, occasions when participants had experienced problems. They tended to put these down to the mobile coverage or broadband connection speeds in their area, along with the system struggling to cope with levels of demand at peak periods.
Although most had what they needed, a small number of households did not. They included families where the adults had limited English. These households tended to be relying on pay-as-you-go mobiles only. The pay-as-you-go option was described as easier to access and understand than contract-based options.
Connected to lack of digital connectivity were challenges with home schooling, finding information and advice and making online applications, including for financial support. None of those affected had heard of or were aware that support might have been available to them from Connecting Scotland. Any connectivity-related advice or support they had received had generally been from their children's school.
Increased transport costs
In some cases, and as noted elsewhere in this report, reductions in public transport services and safety concerns around using crowded buses had led to a significant increase in the use of taxis during the pandemic. Those most affected included:
- Shift workers, including some key workers, and especially those who needed to travel to and from work in the evenings or at weekends
- People with a disabled family member, or a family member with a health condition that made them especially vulnerable to COVID. This included travelling to and from a hospital or other health-related appointments.
Those affected tended to be experiencing moderate rather than serious or severe financial hardship, but the impact of these additional costs was nonetheless described as problematic.
While some costs increased, participants noted that they were also still trying to manage all their other usual outgoings, including rent, mortgage, or Council Tax payments. It was households that had seen a reduction in their non-benefit related income – for example, because of the loss of employment – who were most likely to be concerned about covering these types of costs.
There were also a small number of references to applying for mortgage holidays or Discretionary Housing Payments from those who had lost employment or had reduced income from employment. People had become aware of this option from a range of sources, including mainstream or social media or through information sent to them by their mortgage provider or landlord.
However, even when aware that there were payment holiday options some had chosen to not go down this route. This was generally because they were aware that the money would still need to be found eventually and they preferred to try and manage in the short-term.
Self-Isolation Support Grants
At the time of this study, very few participants had accessed the financial support that was available to low paid workers who were required to self-isolate if testing positive for COVID or identified as a close contact. Those who had done had found it useful, albeit they had needed to wait for a few weeks to receive the payment.
Many participants or members of their household had needed to self-isolate at some point. However, if not in employment, they would not have been eligible for a Self-Isolation Support Grant. Needing to self-isolate, and especially having COVID within the household, had clearly been challenging to both health and wellbeing, but participants tended not to identify additional financial pressures.
There were no reports of participants being in contact with the Self-Isolation Support Service.
Mitigating or supportive factors
Universal Credit uplift
The most frequently mentioned additional financial support was the Universal Credit uplift. Participants tended to refer to it first and generally saw it as the most useful support they had received. The main reasons given were that it was: a regular payment; received over an extended period; and at a sufficient rate to make a genuine difference to a participant's financial situation. This included in terms of reducing the impact of some of the cost increases participants experienced. The uplift had been appreciated by all who had received it and by all types of households. However, those experiencing severe financial hardship tended to be the ones saying that it had made the greatest difference to their financial wellbeing.
Yeah, I get the extra £20. That made a big difference actually, once we know that was coming ... I suppose it really just meant I worried a bit less about what was needing paying ... only a bit mind, but still ...
Lone parent with two children.
For a small number, the uplift had translated into having a little extra and being able to afford a few things that had not been possible before the first lockdown.
Well, I noticed the difference in my shopping and so did the children actually because we were able to buy a lot more healthier foods, more fruit and veg, and my oldest daughter, she loves her fruit and they noticed a big difference ... normally it was just the essentials but with that extra £20 a week, you were able to get that little bit extra for the kids just sort of like a little treat for them.
Lone parent with two children.
Urban area with substantial rural areas.
Other payments associated with free school meal eligibility
In addition to the Universal Credit uplift, a number of families had received additional payments associated with eligibility for free school meals and/or school uniform grants.
Based on the participants for this study, there was nothing to suggest that any families had not have received the additional payments to which they were entitled. However, unlike for the Universal Credit uplift, participants were not necessarily aware of the specifics relating to some of these one-off payments, including in relation to their purpose or title.
Most frequently, parents referred to one-off payments; based on timing and amounts received, these were likely to have been COVID hardship payments and Scottish Child Payment Bridging Payments. Again, these had been well received and were generally said to have provided important additional resources to help cover families' day-to-day costs.
There were also occasional references to having received the Coronavirus Carer's Allowance Supplement.
In terms of the main additional payments made, participants tended to reflect that they had needed the additional funds received. However, they also tended to think that the collective financial response from national and local government, especially for families with free school meal eligibility, had been both appropriate and sufficient.
My wife and I were just talking about this ... what else could they have done really. It's not like they'd had any practice and they did get folk extra money ... so on that at least we really couldn't fault them.
Couple with three children.
Mainly rural area.
In some respects, the participants who struggled most with living on Universal Credit, including when receiving the uplift, were those who had experienced a significant reduction in their income through loss of employment. These participants spoke of struggling to reduce their outgoings to a low enough level to be covered by benefits. They included households that had moved from experiencing moderate to severe financial hardship.
School meal replacement
In many families, the children were eligible for free school meals and a package of support kicked in for those children early in the first lockdown. Initially, local authorities/schools tended to be providing lunch packages that could be picked up from the school. In some cases, there were reports of packages being dropped off at families' homes.
To begin with ... a lady was delivering them to the doorstep. Twice a week it was a bag of stuff for them for sandwiches, fruit and things. Then they changed it later on in the year to payments which went into your bank which was really handy as we were able to get a food shop. They were just eating double because there was nothing for them to do. They just want to eat.
Lone parent with three children.
Urban area with substantial rural areas.
Overall, parents tended to think that schools and nurseries had generally done a good job under very challenging circumstances.
... considering the quickness of it all, I think they did brilliantly really. She did get a bit fed up with what was in there but really, when you think it was the whole country ...
Lone parent, one child.
One specific area highlighted by a small number of parents was that some schools had also ensured that families with teenage girls had received appropriate period products as part of their school meal-focused support. This had been hugely appreciated and very sensitively handled.
There were occasional reports that things had worked less well in more remote areas, either because schools and nurseries struggled to access the necessary supplies or because the time and cost associated with parents collecting meals from school undermined any value they provided.
Other issues raised included that the food being provided:
- Did not always take allergies and food intolerances into account
- Was not always appropriate to the cultural preferences or religious requirements of the family
- May not have been sufficient in volume, especially for older children
- Was not always as healthy as parents would have liked or became so repetitive that children simply refused to eat it.
The shift from receiving food packages to direct payments was universally welcomed, although some parents felt that the amount provided did not fully cover the additional food costs they were incurring. Nevertheless, it allowed parents to make the best use of the additional support being provided, including by buying food that they knew would get used.
Some families had received the payments directly into their bank account. Others had received vouchers for specific shops. The former approach was preferred, principally because it gave parents the option to exercise choice, shop around and make the very best use of the additional resources they had been given.
Role of local authorities
Some participants had been in touch with their local authority in relation to benefits or other financial information or advice. Those who were making a new Universal Credit claim, or who needed an existing claim adjusted, were most likely to have made contact. Other than in the early stages of the first lockdown, participants reported that they had generally received a helpful and efficient service.
Those with existing claims and whose circumstances had not changed tended not to have initiated contact but often reported that they had received frequent and helpful benefit-related information from the local authority. They had generally been prompted to do anything required to receive additional COVID-related payments, and any requirements which were placed on them had been minimal.
Beyond benefit-related conversations, there were only very occasional references to having been in contact with the local authority to seek advice or information about other financial matters. These related to housing costs and there were no references to seeking advice in relation, for example, to energy or digital costs.
Third sector support
A number of participants referred to the additional practical and financial support they had received from third sector organisations. Participants had made contact with these organisations through a range of routes, including referrals from schools or nurseries or other third sector agencies with which they already had contact. Others had carried out web searches or had heard about possible support organisations from family, friends or colleagues. Most reported that they had not had difficulties in finding an organisation that offered the type of support they needed. However, some of those with limited English said that either they had not looked for help or that they had been unable to find anyone to help. They sometimes felt this was about a lack of understanding of how the overall system works.
The types of organisation referred to by those who had received support included: food banks; organisations that specialise in supporting particular groups (such as lone parents or families with children with complex needs); and local, community-based organisations focused on supporting vulnerable members of their community, including those on low incomes.
Those who had used food banks, or who had received similar support from other organisations, included both those who had needed their help in the past, as well as those who had not. They included single people, couples and families with children.
We had never used a food bank before ... I would say the word was 'embarrassing', but everybody was in the same situation. It was more because we had our daughter at home ... she was entitled to free school meals and then all of a sudden, when they're at home, they want to eat every 20 minutes.
Couple with one child.
Remote rural area.
Examples of other support provided by the third sector included:
- Food, clothes and toys parcels, other than from food banks
- Providing white goods or other basic household goods
- Providing cash grants for specific purposes, or helping participants access grant payments.
I ended up ... I had a month's worth of rent arrears which I had to pay off slowly. It was quite difficult, there was a couple of months when I was behind on my gas and my electricity. And then my oven broke ... you know when you're skint and things just happen. They got me a grant for some clothing, food and to help get a new oven. I really did need that help. I don't think we would have managed without it. Well, we'd have had to, but I've no idea how.
Lone parent with three children.
The support provided by third sector organisations was hugely valued, both in terms of the type of support received but also the flexible and responsive way in which it was delivered. Participants spoke of feeling understood and valued, and of receiving an empathetic and non-judgemental service. This was much appreciated, particularly by those who had really struggled and who experienced a crisis during the pandemic.
What could have been done differently
Participants were asked whether they had any suggestions about how their family's financial and other resource needs might have been better met over the course of the pandemic.
Overall, participants tended to think that the benefit-related responses which had been put in place had worked well and had generally been an appropriate response to the crisis. The additional money made available during the pandemic was much appreciated and had certainly made a difference.
Nevertheless, participants often thought that in general their family was having to manage on insufficient resources. This related to standard benefit levels and the amount they were managing on pre-COVID and would be managing on going forward.
As participants placed great value on the £20 uplift to Universal Credit and Tax Credits, it was perhaps no surprise that they also voiced concerns about its withdrawal in October 2021. A number of participants spoke of how difficult they would find it to manage financially without that supplement.
That really helped. Eighty quid to my next door neighbour is nothing. Eighty quid to me is a fridge full of shopping ... my point is, why give it to us in the first place if they are going to take it back off us? People learn to live with that money, now they've took it off us, it's gone.
Lone parent with one child.
Mainly rural area.
A connected and also frequently-made point was that prices seem to be on the rise, including for food, energy and petrol, and that already very tight family budgets will be squeezed further through the winter and beyond.
Irrespective of any price rises, those relying only on benefits generally expected their financial future would be challenging, just as their pre-COVID reality had been. Unless they hoped or expected to move into employment or study, they often saw the next few years as being about managing insufficient resources as best they could.
Those who had experienced a reduction in income, especially because of the loss of employment, tended to be focused on restoring their family income to its pre-COVID levels as soon as possible.
The case studies that follow pick up on a number of the key themes set out in this chapter.
The Hoyland Family's story reflects the challenges of being a younger, first-time mother during the pandemic, as well as those of setting up a new home on a very limited budget. It looks at the vital role that support from families, communities and the third sector played, particularly during the periods of lockdown.
The Buchanan Family's story considers the enormous impact that losing employment can have on a family's financial situation and on the potential to move quickly into serious or severe financial hardship. It also reflects the impact that COVID may have had on mental health and welling especially among teenagers.
The Hoyland Family
Lara and her baby daughter live in Council homeless accommodation in the northeast. Shortly before her daughter was born Lara left her abusive partner and, after a brief stay with her mother, the Council found her temporary accommodation in a furnished homelessness flat.
Her daughter arrived in May 2020 and the whole experience was a very difficult and distressing one. She is young and a first-time mother, and felt lonely, bewildered, and scared. She understands that it was a difficult time, but still feels that some of the hospital staff could have been kinder and more understanding.
When they left the hospital, she moved in with her mother for a few months. If that hadn't been possible, she has no idea what they would have done. She had very little experience with babies, and really needed her mother's help and advice. Because of COVID, she did not get any midwife home visits. She got a couple of phone calls but didn't find that particularly helpful.
She moved back into her temporary flat in July and has managed really well money-wise. She is on Universal Credit, and someone from the Council's homeless team was in touch to make sure she was getting everything she was entitled to. Her energy bills are included in the charges covered by Universal Credit, which is a relief as it meant she didn't need to worry about keeping the place warm during the winter.
When the baby arrived, she was gifted quite a lot of the things she needed. People were incredibly kind and just left things like baby clothes on her doorstep. She also got a couple of packages from a local community organisation but she's not sure how they found out about her. They've had what they needed to get by, and she's always had the money she needed for things like nappies and baby milk. But it has been an incredibly lonely time and she has really struggled with her mental health.
Lara is expecting to be offered a move to a permanent tenancy quite soon. She has been trying to put a bit of money aside each week to help get some of what they'll need. It was the Universal Credit top up that allowed her to do that. She knows they will get a bit of help when they get their new home, but still thinks money is going to be very tight and they are certainly going to be worse off than they are at the moment.
Although she is excited about getting a new home, she is also very apprehensive. It would be nice to think there would be at least a little money to make their new home their own, but she expects that will just have to take time. Her biggest hope is that she will be able give her daughter the best start. She feels like they've both missed out on a lot and that they've got some catching up to do. But she does worry that if money is as tight as she expects it to be, she'll have some tough choices to make.
The Buchanan Family
Gareth and Niamh live in a village in northwest Scotland. They rent their cottage from the local estate. They have three boys, aged 9, 7 and 4 years old. Gareth also has a 15 year-old daughter from a previous marriage who lives with her mother in Inverness. At the start of lockdown Gareth was working for a local tourism business which specialised in wildlife holidays. He was furloughed within a couple of weeks of the scheme opening. He was being paid 80% and the business said they weren't able to top his salary up to 100%.
They quite enjoyed the first lockdown in many ways. He had more time with the children and especially to help his older two boys with their home schooling. They were lucky in where they live, and the boys have plenty of space to run free. His daughter wasn't able to come for her usual weekend stays for a while, but they did lots of video calls and did their best to stay in touch.
They were managing OK financially and, although he had never been highly paid, they did have a small amount of savings to dip into if needed. During lockdown that really wasn't necessary. They saved money on petrol and couldn't go on their planned summer holiday, so all seemed fine.
The company Gareth worked for closed in the autumn of 2020. He started looking for work straightaway but in an area that relies heavily on tourism, there was nothing local. Niamh made an online Universal Credit application for them, so there was money coming in, but it was much less than they were used to. They've cut back wherever they can, but buying food locally is expensive and the alternative is petrol for a 90-minute round trip to a bigger supermarket. Any savings are now gone, and they have had to start borrowing small amounts from her parents. That's now starting to add up, and they are worried about how long it will take to pay back.
The winter of 2020/21 was their hardest time – they all struggled with the second lockdown, but Gareth's daughter found it especially hard, and she cut off contact with them for a while. Her mother struggled to get her the mental health support she needed. Gareth understands that services are under pressure, but they were really scared for her. It was many months before his daughter got help. By that stage she was really unwell. Things are a little better now, but Gareth is very concerned that the pressure on services may mean they step away too soon.
Gareth and Niamh are trying to stay as positive as they can, but it's not always been easy and it's hard to see where any local employment may come from until next spring/summer. They are just hoping by then the tourism industry will be closer to back to normal and there might be work options for both of them. In the meantime, he's starting to look at work options in Inverness area. It could mean spending the better part of three hours a day driving to and from work, and he won't see much of the children, but at the moment he can't see any alternative.
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