The government’s Autumn Statement was supposed to bring certainty after weeks of chaos. However, we know that many young women have been left confused about what the measures mean for them. Here, our Policy and Campaigns Manager, Mark Gale, sets out how the Autumn Statement will impact young women.
Young women and the cost of living crisis
Many people will be worrying about how they can cope this winter but young women are set to be hit especially hard. They earn a fifth less than men of the same age and often haven’t had the time to build up savings meaning they have less resources to help see them through these tough times.
The challenges for young women are many:
- Low-paid work compared to their male peers.
- Expectations that they will take on the bulk of unpaid work like childcare, limiting their earning power.
- More reliant on benefits and other government support including a childcare system that is amongst the most expensive in the world.
The Autumn Statement came, therefore, at a critical time for young women, but what impact will it have?
Pay is increasing but younger women still receiving less
The government announced an increase in the National Living Wage from £9.50 an hour to £10.42 from April next year, an increase of 9.7%, roughly in-line with how prices have risen over the last year. This rate only applies to those ages 23 and over.
There were also minimum wage increases for younger women: the 21-22 rate rose by 10.9%, the 18-20 rate rose by 9.7%, whilst the under 18 rate and apprenticeship rates also rose by 9.7%. Similar rates of increases were announced for younger women so everyone in work can expect their pay to increase.
However, those aged under 23 have to pay the same rent or food prices as everyone else. We are concerned that younger women will continue to face a disadvantage which is why Young Women’s Trust has been calling for the National Living Wage to apply to people of all ages.
Rising taxes may limit the impact of pay rises
Most people only start to pay tax once they earn more than the standard Personal Allowance of £12,750 per year. This means anyone working more than 26 hours at the current National Living Wage rate or 24 hours at the rate from April. Over recent years, the level at which people start paying tax has been increasing, however the rates will now stay the same for until 2028. This means that, for many young women, they will pay more tax over the next few years lessening the impact of any pay increases.
Benefits rising
Benefits, including Universal Credit, have been a vital lifeline for young women in recent years. Even so, the level of benefits has long been insufficient and the cost of living crisis has made it even harder for young women already struggling to make ends meet. It had been feared that benefits would not be increased so young women will be relieved that the Chancellor has promised to increase benefits to cover the rise in prices everyone is facing.
However, the increases won’t happen until April next year, meaning many young women will continue to worry about how to meet the growing costs they face this winter. Furthermore, the childcare allowance in Universal Credit is not increasing. With high childcare costs being one of the biggest barriers to young women increasing their income, this feels like a missed opportunity to ensure they have the support they need.
Cost of living payments and energy bills
Earlier this year, the government announced support to limit the increase in people’s energy bills. This scheme will continue but will be less generous from next year, meaning that young women may face increases in bills of around £500 per year, although the actual level of increases may be significantly more or less depending on things like the size of house or flat they live in and how much energy they use.
There were also announcements of additional cost of living payments of £900 to people claiming means-tested benefits (including Universal Credit, Housing Benefit and Income Support) and £150 for those receiving disability benefits. This means some of the most in-need young women will get extra help.
Positive, but more could be done
Overall, young women may notice many positive impacts of the Autumn Statement. There is certainly more certainty now about what support will be available than there was just a few weeks ago. Increases in wages and benefits, as well as cost of living payments to the most vulnerable will certainly be welcome.
However, many of these increases will not be seen until April next year. This means many young women will still face an uncertain and difficult winter. Young Women’s Trust will continue to work to ensure that the government moves faster to make sure young women have the support they need now to help them build a future in which they are able to thrive and not merely survive.
If you are being impacted by the cost of living crisis, Help With Your Money features organisations which offer information, advice and support. The government’s Cost of living support factsheet outlines the changes in support in the Autumn Statement and how the new measures affect individuals and households.
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