Wales
Numbers in low income
Key points
- The most commonly used threshold of low income is a household income that is 60% or less of the average (median) household income in that year. For a discussion of why this is the most commonly used threshold, see the page on choices of low income thresholds. The latest year for which data is available is 2005/06. In that year, the 60% threshold was worth £108 per week for single adult with no dependent children; £186 per week for a couple with no dependent children; £182 per week for a single adult with two children under the age of 14; and £260 per week for a couple with two children under the age of 14. These sums of money are measured after income tax, council tax and housing costs have been deducted, where housing costs include rents, mortgage interest (but not the repayment of principal), buildings insurance and water charges. They therefore represent what the household has available to spend on everything else it needs, from food and heating to travel and entertainment.
- Around 600,000 people in Wales live in households below this low income threshold. This is around a fifth (22%) of the population.
- This compares with 750,000 (27% of the population) a decade ago.
- As real incomes for the whole of the population have risen, so the numbers of people living in households below a fixed income threshold have been falling. For example, in 2005/06, 11% of the population were living in households below 60% of 1994/95 median income (after allowing for inflation) compared to 26% in 1994/95.
- The proportion of people in low income households in Wales has fallen somewhat more quickly than in most of the rest of Britain, bringing it to near the Great Britain average.
Graph 1: Over time
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Graph 2: Absolute low income
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Graph 3: Compared to GB over time
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Graph 4: Compared to GB by region
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Definitions and data sources
The first graph shows the number of people living in households below 40%, 50% and 60% of the contemporary British median household income for each year since 1994/95.
The 60% median threshold is the most widely accepted threshold of low income and is, for example, that currently used in the UK Government's child poverty targets.
When interpreting changes over time, it is also relevant to monitor the numbers below fixed income thresholds. As well as the numbers below 60% of the contemporary median, the second graph also shows the proportion of the population living in households with incomes below the fixed threshold of 60% of the 1994/95 British median household income (adjusted for price inflation).
The third graph compares the proportion of people in low income households in Wales over time with that for Great Britain as a whole.
The fourth graph shows how the proportion of the population in low income households in Wales compares with the rest of Great Britain. For each region, the first column shows the average proportion on low income for the years 1994/95 to 1996/97 and the second column shows the average proportion on low income between 2002/03 and 2004/05. This averaging over three-year bands has been done to improve the statistical reliability of the results.
The data source for all the graphs is Households Below Average Income, based on the Family Resources Survey (FRS). Income is disposable household income after deducting housing costs. All 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.