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.  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. 1  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 has followed similar trends over time in all types of authority: falling steadily from February 2000 to February 2008, rising sharply in the year to February 2009, and broadly unchanged since then.
  • Twice as many working-age people in Blaenau Gwent and Merthyr Tydfil are in receipt of out-of-work benefits as in Ceredigion, Monmouthshire and Powys.
  • 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.
  • The proportion of older people in receipt of the guaranteed element of Pension Credit has followed similar trends over time in all types of authority: rising between 2003 and 2005 and steady since then.
  • More people are in receipt of guaranteed Pension Credit in The Valleys than elsewhere (except for Torfaen) but the differences are much less than for working-age people in receipt of out-of-work benefits.

Definitions and data sources

There is no direct data on the location of low income people within Wales.  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 each year.

The first and second graphs are concerned with the proportion of working-age people who are in receipt of one or more ‘key out-of-work benefits’.

‘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 first graph shows the proportion of those of working age claiming at least one key out-of-work benefit.  The data is shown separately for The Valleys, Cardiff and the rest of Wales.

The second graph shows, for the latest year, 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 super output area.

The third and fourth graphs are concerned with the proportion of people aged 60 and over who are in receipt of the guaranteed part of Pension Credit and its predecessors (Minimum Income Guarantee and Income Support).  This measure, rather than the broader measure of key benefits, is used because those in receipt of other benefits who have a low income will also be eligible for the guaranteed part of Pension Credit.  The lower age limit of 60, rather than retirement age, is used because this is the age at which people become eligible for Pension Credit.

The third graph shows the number of people in receipt of the guaranteed part of Pension Credit and its predecessors as a proportion of all people aged 60 and over.  The data is shown separately for The Valleys, Cardiff and the rest of Wales.

The fourth graph shows, for the latest year, 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 super output area 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 super output area level).

The data source for all 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: high.  The data is thought to be very reliable and is based on information collected by the DWP for the administration of benefits.

1. 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”)