Unfortunately I don’t know how to make a soft shadow only in Unreal.
However, I found another way to add shadows to images. I wrap the image in an overlay and duplicate it in it. In the duplicated object I then set my desired color and opacity. Lastly I use the translation to move the image so that it becomes a shadow.
You can then turn the shadow image into a soft shadow in a graphics program if you want.
I hope this helps others reading this post too.