United Kingdom
Low income by family type
Key points
- All the statistics in this indicator relate to numbers of individuals rather than numbers of families or numbers of households. It is very easy to misinterpret the statistics in this indicator. For example, the statement 'half of all people in lone parent families are in low income' is not the same as the statement 'half of all lone parents are in low income': the former is counting individuals - children as well as adults - whereas the latter is counting families and the two statistics might well be rather different if, for example, larger lone parent families are more likely to be in low income than smaller lone parent families.
- A half of all people in lone parent families are in low income. This is more than twice the rate for couples with children. It is, however, an improvement on the situation a decade ago, when almost two-thirds of all people in lone parent families were in low income.
- The only other family types to have seen an improvement over the last decade are single pensioners and (to a much lesser extent) pensioner couples. In particular, the proportion of single pensioners who are in low income is, at 20%, around half what it was a decade ago.
- The rates of low income for the other family types (working-age couples without dependent children, working-age singles without dependent children, and in working-age couples with dependent children) are all similar to a decade ago.
- Working-age couples without dependent children have the smallest risk of being in low income, with this risk being less than half that for working-age singles without dependent children.
- There is a marked difference in the extent to which low-income people of different family types fall short of the low-income threshold. Three-quarters of the people with very low incomes (below 40% of median household income) are either working-age adults without dependent children or in couples with dependent children. Relatively few are either pensioners or in lone parent families. Part of the reason for these differences can be seen looking at how out-of-work benefit levels compare with the low-income thresholds for different family types (see the indicator on benefit levels).
Graph 1: By family type
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Graph 2: Depth of low income
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Why this indicator was originally chosen
The prevalence of low income varies greatly by family type.
Definitions and data sources
The first graph shows how the risks of being in a low-income household have changed for people in different family types. Note that a couple (and therefore both of its adults) is classified as a pensioner couple if either of the adults is of pensionable age.
The second graph shows, by family type, the number of people living in low-income households. For simplicity reasons, some of the family types from the first graph have been grouped together. Note that working-age adults living with a pensionable-age spouse are counted in the pensioner family type.
The data source for both graphs is Households Below Average Income, based on the Family Resources Survey (FRS). The data relates to the United Kingdom. Income is disposable household income after deducting housing costs. The main low-income threshold is the same as that used elsewhere, namely 60% of contemporary median household income, with the second graph also showing the numbers below 40% and 50%. The data is equivalised (adjusted) to account for differences in household size and composition. The self-employed are included in the statistics. Note that in 2007 DWP made some technical changes to how it adjusted household income for household composition (including retrospective changes) and, as a result, the data is slightly different than previously published figures. The averaging over three-year periods has been done to improve statistical reliability.
Overall adequacy of the indicator: high. The FRS is a well-established annual government survey, designed to be representative of the population as a whole.
External links
- See the DWP site with their annual Households Below Average Income reports.
- See the DWP site on benefit statistics.
- See the HM Revenue & Customs site on tax credit statistics.
- See the HM Revenue & Customs site on tax credits.
- See the DWP site on Pension Credit.
- See the Institute for Fiscal Studies 2010 report entitled What has happened to 'severe' poverty under Labour?
Relevant 2007 Public Service Agreements
Overall aim: Halve the number of children in poverty by 2010-11, on the way to eradicating child poverty by 2020.
Lead department
HM Treasury.
Official national targets
Reduce by a half the number of children living in relative low-income by 2010/11.
Other indicators of progress
Number of children in absolute low-income households.
Number of children in relative low-income households and in material deprivation.
Previous 2004 targets
Halve the number of children in relative low-income households between 1998/99 and 2010/11, on the way to eradicating child poverty by 2020, including:
- reducing the proportion of children in workless households by 5% between spring 2005 and spring 2008; and
- increasing the proportion of parents with care on Income Support and income-based Jobseeker's Allowance who receive maintenance for their children by 65% by March 2008.
By 2008, be paying Pension Credit to at least 3.2 million pensioner households. While maintaining a focus on the most disadvantaged by ensuring that at least 2.2 million of these households are in receipt of the Guarantee Credit.
The numbers
Graph 1
| Family type | Average of 1996/97 to 1998/99 | Average of 2006/07 to 2008/09 |
|---|---|---|
| Working-age couples without dependent children | 10% | 12% |
| Working-age singles without dependent children | 23% | 25% |
| In working-age couples with dependent children | 23% | 23% |
| In working-age singles with dependent children | 63% | 50% |
| Single pensioners | 38% | 20% |
| Pensioner couples | 22% | 16% |
Graph 2
|
Millions of people | |||
|---|---|---|---|
| Family type | Below 40% of median | 40-50% of median | 50-60% of median |
| In working-age couple families with dependent children | 2.0M | 1.2M | 1.4M |
| In working-age families without dependent children | 2.2M | 0.9M | 0.9M |
| In lone parent families | 0.8M | 0.8M | 0.9M |
| In pensioner families | 0.7M | 0.6M | 0.9M |