United Kingdom
Low income by age group
Key points
Overall
- The proportions of children and pensioners who are in low-income households are both lower than a decade ago while the proportion of working-age adults without dependent children in low-income households has remained unchanged.
- The rates for both children and pensioners both started falling in about 1999/00, with the rates for pensioners falling more sharply from 2003/04. In both cases, however, the reductions ceased in 2004/05 and have risen since then.
Children
- The proportion of children living in low-income households (using the low-income threshold of the 60% of median income after deducting housing costs) fell from 34% of all children in 1996/97 to 28% in 2004/05 before rising to 30% by 2006/07.
- Nevertheless, children are still much more likely to live in low-income households than adults: 30% compared to 19%.
- In terms of absolute numbers, the majority of the fall has been among children in couple families rather than lone parent families (also see the indicator on low income by family type).
- The relatively high proportion living in low-income households does not end when childhood formally ends (at age 16, or age 18 for those in full-time education) but continues undiminished through to age 21.
- See the indicator on children in low-income households for more statistics about children in low-income households.
Pensioners
- The proportion of pensioners living in low-income households fell from 29% of all pensioners in 1996/97 to 17% in 2005/06 before rising to 19% in 2006/07.
- Pensioners are now less likely to be living in low-income households than non-pensioners.
- Most of the fall has been among single pensioners rather than pensioner couples (also see the indicator on low income by family type).
- See the indicator on low income among pensioners for more statistics about pensioners in low-income households.
Working-age adults without dependent children
- In contrast to the trends for children and pensioners, the proportion of working-age adults without dependent children living in low-income households has remained unchanged, at around 16-17%.
- In terms of absolute numbers, the number of working-age adults in low-income households has increased by 400,000 since 1996/97, with a roughly equal split between single adults and couples. This reflects a rise in the size of the underlying population group.
- Single working-age adults without dependent children are now more likely to live in low-income households than the population on average (also see the indicator on low income by family type). They are also twice as likely to be in low income as working-age couples without dependent children (24% compared to 11%).
- A third of all people in low-income households are now working-age adults without dependent children, and the majority of these are single adults rather than couples.
Graph 1: Over time
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Graph 2: Absolute numbers
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Graph 3: Shares
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Graph 4: By age
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Why this indicator was originally chosen
Trends in the prevalence of low income are very different for different age groups.
Definitions and data sources
The first graph shows the risk of a person being in a low-income household, with the data shown separately for children, pensioners and working-age adults without dependent children. For presentational reasons, the figures for working-age adults with dependent children (which broadly follow the same trends as for children themselves) are not shown.
The trends are somewhat different when considered in terms of absolute numbers rather than percentage risks. To illustrate this, the second graph shows the numbers of people in low-income households by type of person (children, pensioners and working-age adults with or without dependent children) and family type (single adult or couple), showing the change in the numbers between the latest year and a decade earlier.
The third graph shows, for the latest year, a breakdown of the people in low-income households according to whether they are children, pensioners, working-age adults with dependent children or working-age adults without dependent children.
The fourth graph shows the risk of a person being in a low-income household by age. The ages are banded in five year age bands from 25 onwards but, for those under the age of 25, the bands have been chosen by grouping years with similar risks together, noting that there is a marked change around the age of 21. To improve its statistical reliability, the data is the average for the latest three years.
The data source for all the graphs is Households Below Average Income, based on the Family Resources Survey (FRS). A child is defined as an individual who is either under 16 or is an unmarried 16- to 18-year-old on a course up to and including A level standard (or Highers in Scotland). For 2002/03 onwards, the data relates to the United Kingdom whilst the data for earlier years is for Great Britain (FRS did not cover Northern Ireland until 2002/03) and, given this, the data in the second graph relates to Great Britain whilst that in the third graph 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. All 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.
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.
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
| Year | Pensioners | Children | Working-age adults with dependent children | Working-age adults without dependent children |
|---|---|---|---|---|
| 1994/95 | 28% | 33% | 26% | 17% |
| 1995/96 | 28% | 33% | 26% | 16% |
| 1996/97 | 29% | 34% | 27% | 17% |
| 1997/98 | 29% | 33% | 26% | 16% |
| 1998/99 | 29% | 34% | 26% | 16% |
| 1999/00 | 28% | 33% | 26% | 16% |
| 2000/01 | 26% | 31% | 25% | 16% |
| 2001/02 | 26% | 31% | 24% | 16% |
| 2002/03 | 24% | 30% | 24% | 16% |
| 2003/04 | 21% | 29% | 23% | 17% |
| 2004/05 | 18% | 28% | 23% | 16% |
| 2005/06 | 17% | 30% | 25% | 18% |
| 2006/07 | 19% | 30% | 25% | 18% |
Graph 2
| Millions | ||||
|---|---|---|---|---|
| Group | In single adult families | In couple adult families | ||
| 1996/97 | 2006/07 | 1996/97 | 2006/07 | |
| Working-age adults without dependent children | 2.3M | 2.5M | 1.3M | 1.5M |
| Working-age adults with dependent children | 1.0M | 0.9M | 2.3M | 2.2M |
| Pensioners | 1.7M | 0.9M | 1.2M | 1.1M |
| Children | 1.8M | 1.6M | 2.5M | 2.2M |
Graph 3
| Group | Millions |
|---|---|
| Working-age adults without dependent children | 4.1M |
| Working-age adults with dependent children | 3.2M |
| Pensioners | 2.0M |
| Children | 3.9M |
Graph 4
Figures are as shown in the graph.