SCOTLAND

Location of low income

Graphs on this page:

Supporting information:

Key points

  • Data on rates of low income is not available at a sub-regional level.  This is partly because the sample sizes of the relevant survey (the Family Resources Survey) are nowhere near sufficient to provide such estimates and partly because the survey is not designed to be representative at a sub-regional level. 1  The analysis in this indicator therefore has to use different data, namely data about benefit recipiency.  As discussed below, however, such statistics are likely to underestimate the relative prevalence of low income in rural areas, and this should be borne in mind when looking at the results.
  • For people of working-age, the only directly relevant available data relates to those in receipt of out-of-work benefits.  However, as a) this does not include anyone who is in low income because they are low paid and b) it includes everyone in receipt of out-of-work disability benefits even though they are not means-tested, variations in its geographic prevalence are not necessarily a good proxy for variations in the geographic prevalence of low-income working-age people. 2  For example, the proportion of low-income people who are in working families (as opposed to workless ones) is much higher in rural areas than in urban areas, at least in England (see the indicator on low income by work status in rural England).  As a result, the relative ranking of rural areas by benefit recipiency will tend to place them lower in the rankings than would be the case for low income.
  • The proportion of working-age people in receipt of out-of-work benefits is more than twice as high in Glasgow, Inverclyde, West Dunbartonshire and North Ayrshire than in some other parts of Scotland.
  • For people of pensionable age, the best sub-regional data relates to those in receipt of the guaranteed Pension Credit.  As this is a means-tested benefit available to most low-income pensioners, variations in its geographic prevalence should be a reasonably good proxy for variations in the geographic prevalence of low-income pensioners.  It does, however, have one potential bias due to the fact that non-take-up rate for this benefit is much higher for those in owner occupation than for those in rented accommodation (see the UK indicator on take-up of benefits by older people).  As a result, the relative ranking of areas with relatively little rented accommodation (e.g. rural areas) will tend to place them lower in the rankings than would be the case for low income.
  • People in receipt of guaranteed Pension Credit is the best indicator available for the geographic distribution of low income among pensioners.  More than twice as many people are in receipt of guaranteed Pension Credit in Glasgow than in most of the rest of Scotland.

Definitions and data sources

There is no direct data on the location of low income people within Scotland.  In this context, this indicator looks at the location of people who are reliant on the state for their income.

For all the graphs and maps, the data is for the month of February of the latest year.

The first graph shows how the proportion of the working-age population who are in receipt of a key out-of-work benefit varies by local authority.  The map shows the same data but by data zone.

‘Key out-of-work benefits’ is a DWP term which covers the following benefits: Jobseeker’s Allowance, Income Support, Employment and Support Allowance, Incapacity Benefit, Severe Disablement Allowance and Carer’s Allowance.  Note that this list is slightly different from ‘key benefits’, which also include Disability Living Allowance.

The second graph shows how the proportion of people aged 60 and over in receipt of the guaranteed part of Pension Credit varies by local authority.  The map shows the same data but by data zone and using the number of people of pensionable age as the denominator (estimates of the numbers of people aged 60 and over not being available at a data zone level).

The data source for both the graphs and maps is the DWP Work and Pensions Longitudinal Study.  The data has been analysed to avoid double-counting of those receiving multiple benefits by matching data from individual samples.

Overall adequacy of the indicator: limited.  The data is considered to be very reliable but is only an indication of geographic variations in low income.

1. In 2010, the Scottish Government did publish some estimates on low-income rates by local authority.  However, these estimates were developed by a complex computer model rather than being ‘actual data’.  Also note that one of the main surveys on which this analysis was based (the Family Resources Survey) does not aim to have representative samples at a local authority level and it is for this reason that the Government department which undertakes the survey (the Department of Work and Pensions) has stated that the Family Resources Survey should not be used for local authority analyses. 
2. In an attempt to cater for these two problems, some researchers use the “number of income deprived people” statistics from the English, Scottish, Welsh and Northern Irish Indices of Deprivation.  In these indices (at least in England), the first problem is dealt with by adding in the number of people in receipt of tax credits but still with a low income and the second problem is dealt with by simply excluding all those in receipt of Incapacity Benefit.  The tax credit inclusion clearly improves the reliability of the statistics as a proxy for low income but this cannot be done by external researchers such as ourselves because the Government has deemed the data to be ‘disclosive’.  On the other hand, the Incapacity Benefit exclusion is not an obvious improvement (it is simply excluding them all rather than including them all) and has the disadvantage of making the statistic less obviously meaningful (i.e. moving it from “recipients of out-of-work benefits” to “recipients of selected out-of-work benefits”).