- Using the government’s preferred measure of low income and that which is used in its official targets – below 60% of median income – 3.9 million children in the UK were living in low-income households in 2008/09 after deducting housing costs. This is 0.6 million – or 13% – less than in 1998/99. Numbers were falling between 1998/99 and 2004/05 but have risen since then. As a result, the numbers in 2008/09 were back up to the levels of 2002/03.
- Children are still much more likely to live in low-income households than the population as a whole: 30% compared to 22%.
- The government’s short term target was to reduce the number of children in low-income households by a quarter by 2004/05 compared with 1998/99. This implied a maximum of 3.3 million children living in low-income households by 2004/05. Given that the actual number in 2008/09 was 3.9 million, the government is – four years later – still 0.6 million above its target for 2004/05.
- Using an alternative measure of low income, namely before rather than after deducting housing costs, the number of children in low-income households fell from 3.4 million in 1998/99 to 2.8 million in 2008/09. This was a fall of 18% compared with the government target of 25%. In other words, on the before deducting housing costs measure, the government is still 0.2 million above its 2004/05 target and 1.1 million above the target set for 2010/11.
- A half of all people in lone parent families are in low income. This is more than twice the rate for couples with children. Two-fifths all the children in low-income households are in lone parent households.
- A child’s risk of low income varies greatly depending on how much paid work the family does. However, unless all adults in the family are working (and at least one of them full time), the risks of being in low income are still substantial: 90% for unemployed families, 75% for other workless families and (notably) 35% for those where the adults are part-working.
- Since the mid-1990s, these risks have remained broadly unchanged over the last decade for each family work status.
- Among children in low income, the number in working families is higher than in the mid-1990s (largely because of a sharp rise in the last few years) whilst the number in workless ones is lower. As a result, more than half (57%) of all children in low income now live in families where at least one of the adults is in paid work. This is a very different balance from the mid-1990s, when the majority were in workless families.
- Most of the lone parents in low income are not working. In contrast, most of the couples with children in low income do have someone in paid work. The net result is that most of the children in low-income households are either in couple families where someone is in paid work or in workless lone parent families.
- Inner London has a much higher proportion of children in low-income households than any other region: at 44%, thirteen percentage points higher than the average for the United Kingdom as a whole.
Why this indicator was originally chosen
Even including those households where the adults are in paid work, income in households with children is on average lower than in households without. A higher proportion of children are below low-income thresholds than children.
As well as the total number of children in households with low incomes, this indicator also compares the proportion of children in low-income households to the proportion of adults in this situation, showing the excess of children in relation to adults.
In low-income households, food represents by far the largest proportion of spending on children. For example, in households on Income Support, two thirds of the allowance for children is for food, but average spending by parents on their children is very much higher (about 1½ times) than these allowances. In these households it is the parents, especially mothers, who make the sacrifice, including going without food, new clothes and shoes, and holidays, in order to ensure that their children do not go without on a daily basis. 1 But even where parents do make sacrifices, more than 10% of children have still been defined as ‘poor’ on the basis of lacking three or more ‘necessities’, and over 3% were defined as ‘severely poor’ on the basis of going without five or more ‘necessities’. 2 Items identified in this context included a warm coat, properly fitted shoes, three meals a day and money to allow a child to participate in a school trip. These circumstances clearly constitute exclusion from the customary consumption activities of a family with children, and imply considerable deprivation across the whole household.
A considerable amount of what is spent on children, 10% on average, is provided by other people, mainly grandparents and other relatives but also friends. The broad family context in which children grow up is clearly important with respect to their economic circumstances as well as their social stability. Children at the greatest risk of poverty are those in lone parent households, in part because of the smaller extended family network in operation.
A final area which could have been the subject of a key indicator if the data were available concerns child employment. Child employment remains a largely hidden area, overseen by fragmented legislation, with no nationally collected statistics. Yet recent research has suggested that up to 2 million school children between the ages of 10 and16 years have part-time jobs during the school term and that children often work illegally. 3 One in ten children in one survey were the only member of their household in employment, with many other children subsidising their household income. 4 Child employment poses serious health and safety risks for children, with high rates of accidents and injuries suffered by young workers. School performance is likely to be adversely affected through feeling tired – or playing truant in order to engage in paid work. 5
Definitions and data sources
The first graph shows the number of children living in low-income households, both before and after deducting housing costs. It also shows four Government targets:
- The Government’s original target to reduce the number of children in relative low income by a quarter by 2004/05 compared to the number in 1998/99. Two versions of this target – before and after deducting housing costs – are shown as the government’s child poverty target for 2004/05 was ambiguous about which it was using.
- The Government’s target to reduce the number of children in relative low income by a half by 2010/11 compared to the number in 1998/99 – this measure being shown on a before deducting housing costs basis only as that is the basis for the official Government target. This target was set out in the 2007 Public Service Agreement (see below) and repeated in the Child Poverty Act 2010.
- The Government’s target to reduce the number of children in relative low income to less than 10% of all children by 2020/21 – this measure again being shown on a before deducting housing costs basis only. This target was set out in the Child Poverty Act 2010 and effectively replaces the more ambitious version of the target set out in the 2007 Public Service Agreement.
The second graph shows the proportion of children living in low income after deducting housing costs. The bar is split to show the extent to which children are at a higher risk than adults of being in households below that threshold.
The risks are very different for lone parents and couples with children. To illustrate this, the third graph shows the risks of being in low income by family type. Note that the phrase ‘without children’ means ‘without dependent children’.
The fourth graph shows the risk of children being in low-income households by region.
The fifth graph shows the risk of a child being in a low-income household, with the data shown separately for the following family work statuses: all working (single or couple, with one in full-time work and the other – if applicable – in full-time or part-time work); part working (couples where one is working and the other is not plus singles or couples where no one is working full-time but one or more are working part-time); workless – unemployed (head or spouse unemployed) and workless – economically inactive (includes long-term sick/disabled and lone parents).
The sixth graph shows, over time, the number of children who are in low-income households, with the data shown separately for families where someone is in paid work and for workless families.
The seventh graph shows, for the latest year, a breakdown of the children who were in low-income households by family type (couple or lone parent) and work status (workless or someone in paid work).
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). The two exceptions to this are the first and sixth graphs, both of which show numbers over time: the data in the first graph prior to 2002/03 has been scaled up to put it onto a comparable United Kingdom basis to that for later years whilst the data in the sixth graph is for Great Britain throughout. 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.
- For a discussion of what is required to achieve the government’s targets for child poverty reduction, see the 2008 Joseph Rowntree Foundation report entitled Addressing in-work poverty, the Institute for Fiscal Studies’ 2007 report entitled Eradicating child poverty, and the Joseph Rowntree Foundation’s 2006 reports entitled What will it take to end child poverty? Firing on all cylinders and Can current policy end child poverty in Britain by 2020?.
- See the Unicef reports Child poverty across industrialised nations (1999) and A league table of child poverty in rich nations (2000).
- See the Joseph Rowntree Foundation reports entitled Child poverty in large families (2006) and The experience and attitudes of low income families towards money (1999).
- See the Microsimulation Unit Research 2001 report entitled Five Labour budgets (1997-2001): impacts on the distribution of household incomes and on child poverty.
- See the HM Revenue & Customs site on tax credits, tax credit statistics and child benefit.
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.
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.
|Year||After deducting housing costs||Before deducting housing costs|
|Year||Millions in low-income households||Proportions in low-income households|
|The rate for the overall population||Additional to the rate for the overall population||The rate for the overall population||Additional to the rate for the overall population|
|In working-age singles with dependent children||50%|
|In working-age couples with dependent children||23%|
|Working-age singles without dependent children||25%|
|Working-age couples without dependent children||12%|
|Yorkshire and The Humber||31%|
|Family work status||1996/97 to 1998/99||1997/98 to 1999/00||2006/07 to 2008/09|
|In all-working families||5%||6%||7%|
|In part-working families||36%||37%||35%|
|In workless families - unemployed||91%||90%||90%|
|In workless families - economically inactive||81%||82%||74%|
|In working families||In workless families|
|In couple families with work||48%|
|In lone parent families with work||10%|
|In couple families without work||13%|
|In lone parent families without work||29%|