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23 Low-income indicators (Great Britain):
- a) a reduction in the proportion of working-age people living in households with relative low incomes;
- b) a reduction in the proportion of working-age people living in households with low incomes in an absolute sense; and
- c) a reduction in the proportion of working-age people living in households with persistent low incomes.
Baseline and trends: Baseline year – 1998/99. Data for the three indicators are presented in the chart and tables below, though information for the persistent low-income indicator is shown only in the table. While the tables aim to provide a comprehensive picture of progress by including data for a range of low-income thresholds, the chart and commentary focus on the 60 per cent of median income threshold for the relative and absolute indicators.
The proportion of working-age people living in households with relative low incomes remained broadly constant between 1996/97 and 2005/06, on both before and after housing costs measures. The latest data shows a slight increase from 14 per cent to 15 per cent before housing costs and 18% to 20% after housing costs.
The proportion of working-age people living in households with absolute low incomes fell from 14 per cent in 1998/99 to 10 per cent in 2001/02 and has remained at 10 per cent in subsequent years before housing costs. On the after housing costs measure absolute low income fell from 19 per cent in 1998/99 to 13 per cent in 2004/05 but increased to 14 per cent in 2005/06.
Seven per cent of working-age people lived in a household with a low income in at least three out of four years, on the before housing costs measure, at the baseline (1997–2000) which remained at 7 per cent until 2001–04, and fell to 6 per cent for 2002-05. The after costs housing measure saw a decrease from 9 per cent to 8 per cent for 2000_2003 and has remained 8 per cent subsequently.
Percentage of working-age people living in low-income households (Great Britain)
Note: Some figures have seen slight revisions since the last Opportunity for all report, reflecting methodological improvements, or changes to the baseline measurement.
| Relative low income | Absolute low income | ||||||
|---|---|---|---|---|---|---|---|
| Low-income threshold | 50% of median* | 60% of median | 70% of median | 50% of median* | 60% of median | 70% of median | |
| Before housing costs |
1996/97 | 8% | 15% | 22% | 9% | 16% | 23% |
| 1997/98 | 8% | 15% | 21% | 9% | 15% | 22% | |
| Baseline 1998/99 | 8% | 14% | 21% | 8% | 14% | 21% | |
| 1999/2000 | 8% | 14% | 21% | 8% | 13% | 20% | |
| 2000/01 | 9% | 14% | 21% | 8% | 12% | 18% | |
| 2001/02 | 8% | 14% | 20% | 6% | 10% | 16% | |
| 2002/03 | 9% | 14% | 21% | 6% | 10% | 15% | |
| 2003/04 | 9% | 14% | 21% | 6% | 10% | 15% | |
| 2004/05 | 9% | 14% | 21% | 6% | 10% | 14% | |
| 2005/06 | 9% | 15% | 21% | 7% | 10% | 15% | |
| After housing costs |
1996/97 | 15% | 21% | 26% | 16% | 22% | 27% |
| 1997/98 | 14% | 19% | 24% | 15% | 20% | 25% | |
| Baseline 1998/99 | 14% | 19% | 24% | 14% | 19% | 24% | |
| 1999/2000 | 14% | 20% | 25% | 13% | 18% | 23% | |
| 2000/01 | 14% | 19% | 24% | 12% | 17% | 21% | |
| 2001/02 | 13% | 19% | 24% | 10% | 15% | 19% | |
| 2002/03 | 14% | 19% | 24% | 9% | 14% | 18% | |
| 2003/04 | 14% | 19% | 24% | 10% | 14% | 18% | |
| 2004/05 | 13% | 18% | 24% | 9% | 13% | 17% | |
| 2005/06 | 15% | 20% | 26% | 10% | 14% | 18% | |
*Households reporting the lowest incomes may not have the lowest living standards. The bottom 10 per cent of the income distribution should not, therefore, be interpreted as having the bottom 10 per cent of living standards. This is a particular issue for lower thresholds, such as 50 per cent of median. Other higher thresholds are less affected by this. |
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| 1991-94 | 1992-95 | 1993-96 | 1994-97 | 1995-98 | 1996-99 | 1997-2000 | 1998-2001 | 1999-2002 | 2000-03 | 2001-04 | 2002-05 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Before |
Below 60% of median | 8% | 8% | 7% | 7% | 7% | 7% | 7% | 7% | 7% | 7% | 7% | 6% |
| Below 70% of median | 13% | 14% | 14% | 13% | 13% | 13% | 13% | 13% | 12% | 13% | 12% | 12% | |
| After housing costs |
Below 60% of median | 11% | 11% | 11% | 11% | 10% | 10% | 9% | 9% | 9% | 8% | 8% | 8% |
| Below 70% of median | 15% | 16% | 16% | 15% | 15% | 15% | 14% | 15% | 14% | 15% | 14% | 13% | |
|
Note: Some of the figures have seen small revisions since the last Households Below Average Income (2004/05) report. This is due to changes to the base dataset made by the data suppliers of the British Household Panel Survey. Changes to Households Below Average Income data before 2003/04 were due to changes to the Family Resources Survey grossing regime, either through the method used or taking on board new, post-census population information. Further details are available at: www.dwp.gov.uk/mediacentre/pressreleases/2005/feb/iad-170205-frs.pdf. More recent changes since then are due to methodolgical improvements. |
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Definition: Working-age people include those who are not children – see definition of a child at indicator 2 – and those who are below State Pension Age (less than 65 for men, less than 60 for women).
Low-income thresholds are 50, 60 and 70 per cent of median household income (before and after housing costs):
a) relative low income – median income moving each year;
b) absolute low income – median income fixed at 1998/99 levels in real terms; and
c) persistent low income – low income in three out of the last four years (60 and 70 per cent of median only).
Data for thresholds of median income and full definitions are available in Households Below Average Income 1994/95–2005/06. Methodological improvements have led to some amendments to the data for the persistent low income indicator, though the trend has not changed.
Data source: Households Below Average Income and Low-Income Dynamics information based on Family Resources Survey and British Household Panel Study data.
Further information:
The percentage of working-age adults living in low income households in Great Britain for various breakdowns of society, including by region and ethnicity, can be found in the latest Households Below Average Income 1994/5-2004/05 report at: www.dwp.gov.uk/asd/hbai/hbai2006/contents.asp
The Persistent low income series is published in the report Low Income Dynamics Paper, 1991-2004: www.dwp.gov.uk/asd/hbai/low_income/Low_income_dynamics_1991-2004.pdf 
Research Evidence:
“Low-income homeowners in Britain: descriptive analysis”
www.dwp.gov.uk/asd/asd5/rports2005-2006/rrep251.pdf
Further Breaks
Rural Urban analysis
Analysis: Local Authority Classification, England 1
Baseline data: 1996/97 Estimates are based on a three year average 2
Current data: 2004/05 Estimates are based on a three year average 3
Relative Low Income:4
- Between 1996/97 and 2004/05 the percentage of working-age adults living in households below 60% of the GB median relative low income has shown little change in Urban and Rural areas measured on both Before and After Housing Costs.
- The highest recordings of the above were in the Before Housing Costs5 category in Large Urban and Major Urban (15% and 16% respectively) in 2004/05. The Significant Rural category recorded 12% in 2004/05. Of these three categories Major Urban increased 1% since 1996/97 and Large Urban and Significant Rural remained constant.
- After Housing Costs reflects overall larger proportions of working-age adults living in households below 60% of the GB median on low incomes compared to the Before Housing costs measure. Significant Rural remained constant at 16% compared with the reductions for Rural R80 and Rural R50 (from 17% to 15% and 16% to 14% respectively).
Absolute Low Income:
- There are larger positive percentage changes for Urban and Rural areas from 1996/97 to 2004/05 for the Absolute Low Income measure both Before and After Housing Costs.
- An interesting change on Before Housing Cost basis were 7 percentage point reductions recorded for Other Urban (to 8%) and Major Urban (to 10%) in this period. This can be compared with a 6 percentage point reduction for Rural R50 (to 7%).
- For After Housing Costs Other Urban reduced in this period by 10 percentage points, ( to 12%) compared with 8 percentage point reductions for Rural R80 and Rural R50 (to 10% and to 9% respectively).
More information at: http://www.defra.gov.uk/rural/ruralstats/ofa.htm (this link will take you to the Department for Environment, Food and Rural Affairs website)