UK’s poorest women lose an average 26% of their income to social security cuts since 2010, finds WBG

The poorest women in the UK will have lost on average 26% of their income from cuts to social security since 2010, finds new analysis by the Women’s Budget Group.

The Women’s Budget Group has today published intersectional analysis of the impact of cuts to social security since 2010 projected to 2027/8 based on pre-election Government spending plans. This shows that women in the poorest decile face a reduction of £3,348 per year, 26% of their baseline income.

This follows from research published by the End Child Poverty Coalition yesterday which found that in two-thirds of constituencies, at least one in four children are in relative poverty after housing costs ¹ .

Household type and children

• Lone parents lose an average of £6,992 per year (an 18% reduction of their baseline income).
• Couples with children lose an average of £2,262 per year, compared to couples with no children (£580 per year).
• Households with three or more children experience, on average, a loss of £5,962, of which £1,838 corresponds to the loss of the “two-child” limit on benefits specifically. This is a cut of almost a quarter (23%) of the baseline income for these households.

Gender

• On average, women lose £1,790 per year as a result of the changes in benefits (7% of their baseline income), whereas men lose £1,023 per year on average (3% of their baseline income).

Gender and income deciles

• Women in the poorest decile face a reduction of £3,348, (26% of the baseline income), compared to men in the same poorest decile face a reduction of £2,442 (22% of baseline income).

Gender and ethnicity

• Women from Black, African, Caribbean, and Black British backgrounds lose an average of nearly £2,500 per year, equivalent to 10% of their baseline income.
• Asian and Asian British women lose slightly less at £2,212 per year, representing a slightly higher proportion of their baseline income, 11%.

Gender and Disability

• Disabled women lose on average £2,553 per year (11% of their annual net income) compared to a compared to £1,952 for disabled men and £562 loss for non-disabled men (2% of their annual net income).

Commenting on the findings, Dr Zubaida Haque, Head of Research and Policy and Deputy Director said,

“Any one of us is only ever one job loss, relationship breakdown, unexpected bill or tragic event away from turning to the social security safety net that should be there to catch us when we need it. We have had a series of economic shocks – the global financial crash, the pandemic and now the cost of living crisis, which have all eroded households’ financial resilience, especially low-income households.

“Yet rather than increase or maintain levels of support, social security has been cut by £14bn since 2010. Our findings show that it is women on the lowest incomes, lone parents, Black and Asian women, disabled women and their children who are bearing the brunt of the cuts. Meanwhile, as the real value of most cash benefits has been cut, the cost of living has skyrocketed.

“The devastating impacts include record numbers of households having to turn to food banks, child poverty having more than trebled, households switching off necessities like fridges and freezers, and soaring numbers of people becoming homeless. For these families, austerity has never really ended.

“Households with children, especially those with three children or more are the ones most harmed by social security cuts since 2010. It is shocking that successive governments since 2010 have chosen to penalise children through the two-child limit on benefits, one of the key drivers of child poverty. They have also chosen to further penalise low-income households who were already struggling financially, including disabled people.

“If the next government is serious about tackling child poverty and addressing persistent inequalities, it must repair and reform the social security system. This starts with scrapping punitive and cruel sanctions and restoring the real value of benefits.”

Figure 1: impact of social security changes between 2010/11 and 2027/28 by decile of net household income

Women in the bottom income decile suffer the most from social security cuts

Figure 2: impact of two child limit and other social security changes by number of children in the household

Larger families lose nearly £2,000 per year because of the two-child limit

The Women’s Budget Group is calling for:

• Increase the real value of benefits to at least restore their pre-2010 values. Also, retain regular uprating of social security benefits for working-age benefits.
• Abolish the Benefit Cap and two-child limit to prevent child poverty, and make other changes to UC such as ending the UC five-week wait and introducing a second-earner work allowance.
• Increase Child Benefit to £50 per child. Child Benefit fell significantly in real terms during austerity. We recommend an above inflation increase to counter this and also close the inequality gaps that widened during the COVID-19 pandemic and the cost of living crisis.
• Restore the link between LHA and actual rental prices and raise LHA to the 50th percentile to ensure the most vulnerable are protected. Ensure that tenant rights are strengthened to protect low-income households, particularly those with children, from soaring rents and the threat of no-fault evictions.
• In the long term, a better social security system should take a life-course approach, be assessed for equality impacts, based on individual entitlements as far as possible, no means-tested, based on needs and encourage the sharing of care.

ENDS

WBG spokespeople are available for interviews.

Please contact

Viktoria Szczypior, Press and Media Officer at WBG at press@wbg.org.uk / 07553663144

Notes to editors

• Analysis carried out by Howard Reed, Director of the economic research consultancy Landman Economics and Senior Research Fellow in Public Policy at the University of Northumbria.
• Distributional analysis using the Landman Economics Tax-Transfer Model (TTM), Family Resource Survey and Living Costs and Food Survey. All cash values are in April 2024 prices. The baseline corresponds to the April 2010 tax benefit system with no changes made except for uprating benefit rates, tax and NICs thresholds and the value of excise duties using the default uprating schema in place in 2010 (ROSSI index uprating for means-tested benefits and RPI uprating for non-means-tested benefits, tax credits, income tax and NICs thresholds and excise duty rates).
• The benefits modelled are: pensioner benefits changes, uprate of working-age benefits, two-child limit, benefit cap, “bedroom tax”, Local Housing Allowance, Universal Credit and other changes that do not fit in the previous categories such as reductions in Council Tax Support (in England) after localization of the benefit in 2013, modellable changes to disability benefits (for example removal of the WRAG premium for Employment and Support Allowance claimants), among others.
• Further details available upon request.