The cost of living and gender: Briefing for a new government

Summary

• Inflation is now at 2.3% but the cost of living crisis is still with us. Falling inflation doesn’t mean that prices are coming down, just that they are going up more slowly. The costs of some key goods and services have also gone up by more than inflation.
• Over the two years from April 2022 to April 2024 food prices rose by 22.5%. Average private rents increased by 8.9% in the year to April 2024.  The average cost of a part-time childcare place for a child under two increased by 7.4%.
• The cost-of-living crisis comes after a decade of wage stagnation and the erosion of social security benefits. This crisis is therefore not only one of rising prices but one of eroding incomes.
• Although the NLW has increased earnings for the lowest-paid workers, this has not been enough to safeguard against poverty. 64% of working-age adults in poverty live in a household where at least one adult is in work , and women, who are more likely to earn below the living wage, are also more likely to be in poverty.
• Women are disproportionately impacted by the cost of living crisis because they earn less than men and are less likely to have savings, their caring responsibilities mean they are less able to take on additional work to meet extra costs.
• Particular groups of women have been hit harder by the cost of living crisis:
• Poverty rates are significantly higher among people from Bangladeshi, Pakistani and Black ethnic groups than among White people. Disabled people face higher costs on average resulting from their impairment or condition.  Single parents, most of whom are women, tend to have lower savings and be more in debt than dual couple households with children. Victim/survivors of domestic abuse, including economic abuse, face greater barriers to leaving an abusive relationship. Women with ‘no recourse to public funds’ are excluded from claiming social security and therefore at high risk of poverty and destitution if they lose work or separate from a partner.

Recommendations

• Reform our social security system by uprating benefits to 2010 levels in real-terms, removing the 5-week assessment period for Universal Credit, ending no recourse to public funds, scrapping the benefits cap, and transferring budgeting advance loans into non-repayable grants.
• Take steps to wipe out both women’s and children’s poverty by abolishing the two-child limit to Universal Credit and uprating child benefit to £50 per week.
• Address inequalities and barriers to women’s employment through better intersectional pay gap reporting, and ensuring that parental leave and pay policies work alongside a flexible by default UK labour market and a universal childcare system (see below). The Labour Party’s Gender Pay Gap review is a very welcome start to this process.
• Raise Local Housing Allowance to the 50th percentile of local rents to ensure those receiving housing allowance don’t face rent shortfalls.
• Government investment in retrofitting of homes and non-domestic buildings, including financing insulation efforts and greening of home heating systems (e.g. heat pump installation), with specific support to social and private renters.
• Commit to investing in social housing, building new, low carbon homes with guaranteed low rents.
• Fully fund a system of high quality universal free childcare. Such a system must include: an increase in staff qualification levels and pay in line with primary education levels to improve retention, job satisfaction and quality of care.
• Invest in the creation of a new universal care system, including raising care worker pay to the Real Living Wage.

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