UK women face declining living standards by 2028 without spending increase

A group of economists from the Women’s Budget Group (WBG) has warned that without a significant increase in public spending, the living standards of the poorest women in the UK will decline by 21% by 2027-28. This analysis highlights the impact of austerity measures and changes to welfare since 2010, predicting that the average woman will be 9.4% worse off than in 2010, while men will see a 5.8% decline. The report emphasizes the need for increased investment in public services and welfare to address these disparities. The WBG advocates for the abolition of the two-child limit and the benefits cap, suggesting that these changes could be funded through fairer taxation methods, such as equalizing capital gains and income tax, and introducing a wealth tax. The report also points out that repeated freezes in working-age benefits have significantly contributed to the decline in living standards, particularly affecting lone parents. As the Labour government prepares for its budget announcement, there is pressure on Chancellor Rachel Reeves to prioritize public spending to prevent further deterioration of living standards. Despite Keir Starmer's commitment to avoid austerity, the previous Conservative administration's financial decisions have left a significant gap in public finances, complicating the situation. The WBG's findings come amid ongoing discussions about the government's tax and spending strategies, with calls for immediate action to transform the social security system. The government has stated its intention to improve economic opportunities for women and address the gender pay gap, but the effectiveness of these measures remains to be seen.