United Kingdom
Low income by family type
Key points
- A half of all lone parents are in low income, two-and-a-half times the rate for couples with children.
- In proportional terms, the proportion of lone parents in low income has been falling faster than that for couples with children. In terms of absolute numbers, however, the fall has been mostly in couple households. This is because the total number of children in couple households has been falling while the total number of children in lone parent households has been rising.
- The fall in the number of pensioners in low income households has mostly among single pensioners rather than pensioner couples. 20% of single pensioners are now in low income households compared 37% in the mid-1990s. The proportion of pensioner couples in low income has fallen more slowly, from 22% to 18%.
- Single working-age adults without dependent children are now more likely to live in low income households than the population on average. They are also twice as likely to be in low income as working-age couples 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. The vast majority of people with very low incomes are either working-age adults without dependent children or couples with children. Relatively few are either lone parents or pensioners.
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 low income 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. Also note that the phrase 'without children' means 'without dependent children', i.e. without any children aged under 16.
The second graph shows the numbers of those on low income grouped by family type and divided according to how much additional money the household would need a week to reach the threshold of 60% of contemporary median income after deducting housing costs.
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 and the low income threshold is the same as that used elsewhere, namely 60% of contemporary median household income. In the first graph, the data is equivalised (adjusted) to account for differences in household size and composition whilst in the second it is not equivalised. 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 HM Revenue & Customs site on tax credits.
- See the DWP site on Pension Credit.
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.
Relevant government policies
- National minimum wage
- Tax credits and their predecessors
- Increases in child benefit
- Pension credit and its predecessors
- Second state pension
The numbers
Graph 1
| Average of 1994/95 to 1996/97 | Average of 2003/04 to 2005/06 | |
|---|---|---|
| Working-age couples without dependent children | 10% | 11% |
| Working-age couples with dependent children | 23% | 20% |
| Working-age singles without dependent children | 24% | 23% |
| Working-age singles with dependent children | 62% | 50% |
| Single pensioners | 37% | 20% |
| Pensioner couples | 22% | 18% |
Graph 2
|
Millions of people | |||
|---|---|---|---|
| Family type | Up to £50 below | £50-100 below | More than £100 below |
| Working-age adults without dependent children | 1.4M | 1.0M | 1.3M |
| Couples with children | 1.4M | 1.0M | 1.7M |
| Lone parent families | 1.5M | 0.7M | 0.4M |
| Pensioners | 1.6M | 0.4M | 0.2M |