Households Below Average Income 2008/09 Peter Matejic (DWP)
HBAI Publication Private households in United Kingdom Main source DWP Family Resources Survey Measurement of living standards as determined by the net disposable income, including poverty statistics Incomes equivalised and analysed Before and After Housing Costs (BHC and AHC) Figures are rounded to the nearest 100,000 or percentage point meaning figures may not sum exactly due to rounding 2
Summary of presentation content Low-income indicators, including low-income, low income and material deprivation and persistent low income Changes since 1998/99 Changes since 2007/08 Low-income population characteristics Income distribution Income growth Persistent poverty 3
Relative and Absolute low-income indicators Relative incomes are assessed against the median of the year in question The indicator falls if the income of poorer households rises faster than the population as a whole Absolute incomes are assessed against the median in 1998/99 adjusted for inflation The indicator falls if poorer households are seeing their income rise in real terms Low income and material deprivation indicator is combination of - Low-income threshold of 70 per cent below median income (BHC) - Material deprivation measure 4
Number of children in low-income households 4.0 Number of children (millions) 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Relative low income (BHC, 60% median) Absolute low income (BHC, 60% 1998/99 median) Low income and material deprivation 5
Number of pensioners in low-income households 3.5 Number of pensioners (millions) 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Relative low income (AHC, 60% median) Absolute low income (AHC, 60% 1998/99 median) Relative low income (AHC, 50% median) 6
Number of working-age adults in low-income households 7.0 Number of working-age adults (millions) 6.0 5.0 4.0 3.0 2.0 1.0 0.0 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Relative low income (BHC, 60% median) Absolute low income (BHC, 60% 1998/99 median) 7
More likely to be in low-income households Working-age adults in workless households Lone parent families Non-white ethnic groups Families containing someone with a disability not in receipt of disability benefits Those in rented accommodation Groups with no savings or who have bills in arrears Working age adults with no qualifications Older pensioners 8
9 RESTRICTED: STATISTICS Percentage of children in low-income by region/country, three-year average Before Housing Costs 97/98-99/00 06/07-08/09 35 30 25 20 15 10 5 0 South East East of England South West Scotland London Northern Ireland East Midlands North West Wales Yorkshire and the Humber North East West Midlands Per cent
10 RESTRICTED: STATISTICS Percentage of pensioners in low-income by region/country, three-year average After Housing Costs 97/98-99/00 06/07-08/09 35 30 25 20 15 10 5 0 Scotland South East West Midlands North West South West East of England North East Wales Yorkshire and the Humber East Midlands Northern Ireland London Per cent
The income distribution in 2008/09 (BHC) Median income 407pw 1.6 60 per cent median 244pw Mean income 507pw 1.4 Number of individuals (millions) 1.2 1.0 0.8 0.6 0.4 0.2 0.0 3.6 million individuals with income above 1,000 per week 1 2 3 4 5 6 7 8 9 10 0 100 200 300 400 500 600 700 800 900 1000 Equivalised household income (in 10 per week bands) 11
3.0% RESTRICTED: STATISTICS Average annual real income growth 1998/99-2008/09 2.5% Average annual growth 2.0% 1.5% 1.0% 0.5% 0.0% Quintile 1 Quintile 2 Quintile 3 (median) Quintile 4 Quintile 5 Income Before Housing Costs Income After Housing Costs 12
Persistent poverty Looks at the same individuals over time An individual is in persistent low income if they have been in low income for three or more of the last four years Uses a relative 60 per cent of median income definition of low income Uses the British Household Panel Survey, funded by the Economic and Social Research Council. Latest data relates to autumn / winter 2007 13
Persistent poverty levels 25 Proportion of group in persistent low income 20 15 10 5 0 1991-1994 1992-1995 1993-1996 1994-1997 1995-1998 1996-1999 1997-2000 1998-2001 1999-2002 2000-2003 2001-2004 2002-2005 2003-2006 2004-2007 Children BHC 60% relative Working age BHC 60% relative Pensioners AHC 60% relative 14
Summary Low-income indicators 1998/99-2008/09 - Numbers of children and pensioners in low income have fallen but working-age has increased Low-income indicators 2007/08-2008/09 - Numbers of children in low income has fallen slightly - Numbers of working age adults in low income increased - Numbers of pensioners in low income decreased - Numbers of children in low income and material deprivation stayed at same level Income growth 1998/99-2008/09 - Growth across all groups - 2 nd quintile has shown biggest average annual rise Income growth 2007/08-2008/09 - No consistent pattern BHC and AHC Persistent poverty 2003-06 to 2006-07 - Reduction in persistent poverty for pensioners, flat for children and working-age adults - Large reductions since 1998-01 15
16 RESTRICTED: STATISTICS
Rounding an example RESTRICTED: STATISTICS To ensure that the figures produced from the survey can provide reliable estimates, we round the figures to the nearest 100,000 This can mean that figures may not sum due to this rounding. - If poverty levels amongst a certain group changed from 1.64 to 1.57 million, the rounded levels of poverty would be 1.6 million in both years as both levels round to this, but the unrounded difference would be 0.07 million which would be rounded to 0.1 million - If the statistics changed from 1.66 to 1.64, the rounded levels of poverty would be 1.7 million in the first year and 1.6 in the second year because of rounding, but the unrounded difference would be 0.02 million which would be rounded to no change Only rounding figures at the final point of calculation of a statistic produces the best estimate 17
18 RESTRICTED: STATISTICS Percentage of working-age adults in lowincome by region/country, three-year average Before Housing Costs 97/98-99/00 06/07-08/09 25 20 15 10 5 0 South East East of England South West Scotland London Northern Ireland Yorkshire and the Humber East Midlands Wales North West West Midlands North East Per cent