Who loses from benefit uprating changes? A gendered analysis

This briefing is part of WBG’s series on the gendered impact of the cost-of-living crisis.

See also:

• The Gendered Impact Of The Cost-of-Living Crisis on Public Services (November 2022)
• The Cost Crisis: a Gendered Analysis (September 2022)
• The income crisis – a gendered analysis (June 2022)
• The gendered impact of the cost-of-living crisis (March 2022)

Background

Social security provides a lifeline for millions of people and for some of the most disadvantaged in our economy. 40% of people on Universal Credit (UC), the biggest working-age benefit, are in paid work. 55% of people on UC are women. ¹ Caring responsibilities are a major barrier to women working more hours and finding better paid but often less flexible jobs. Social benefits are therefore an important complement to women’s incomes.

The current cost-of-living crisis is hitting the poorest families and individuals harder because a higher proportion of their incomes is spent on essentials. The cost of these items, like food and energy, is also increasing more rapidly than the headline inflation figure.

The Government is considering increasing benefits in line with average pay growth, rather than inflation. This would mean a cut in the value of those benefits for the people who are being hardest hit by this crisis.

Social security benefits, just like other forms of income such as wages, need to rise in line with inflation in order for people not to see a fall in the money they have available. During a cost-of-living crisis, uprating benefits in line with the price level becomes urgent to stop people from going hungry or cold.

By not increasing benefits in line with inflation, the Government would effectively be cutting the value of those benefits. In April 2022, this was already the case, when the Government uprated benefits in line with the 3.1% inflation rate of September 2021, at a time when inflation was 9%. Low-income families already have less money to spend than they did a year ago. Combined with tax cuts announced in the September Budget, this cut to benefits will widen inequality between rich and poor, and between men and women.

^[1] DWP (Feb 2022) Universal Credit statistics, 29 April 2013 to 13 January 2022

Read the full briefing here