Summary
Key facts
Income
- 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.
- In 2005/06, around 13 million people in the UK were living in households
below this low income threshold. This is around a fifth (22%) of the population.
- This 13 million figure is an increase of ¾ million compared with the
previous year, 2004/05. It follows six uninterrupted years of
decreases from 1998/1999 to 2004/05 and is the first increase since 1996/97.
- The number of people on low incomes is still lower than it was during the
early 1990s but much greater than in the early 1980s.
- The proportion of children and pensioners who live in low income
households has been falling. In contrast, the proportion for
working-age adults without dependent children has remained broadly
unchanged. 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.
- At 30%, disabled adults are twice as likely to live in low income
households as non-disabled adults. This difference markedly higher than a decade ago. The main
reason why so many disabled people are in low income households is their high levels of worklessness. A
graduate with a work-limiting disability is more likely to be lacking but
wanting work than an unqualified person with no disability.
- Among working-age adults living in low income households, half now have
someone in their famility who is in paid work.
- The level of Income Support for both pensioners and
families with two or more children has gone up much faster than average
earnings in recent years, but that for working-age adults without children
has fallen considerably behind.
- Half of all people in social housing are in low income households poverty compared to one in seven
of those in other housing tenures.
- Inner London is deeply divided: it has by far the highest proportion of people
in low income but also a high proportion of people on a high income.
- Except for households in the top and bottom tenths of the income
distribution, households with below-average incomes have enjoyed bigger
proportional increases over the last decade than households with above-average
incomes. In terms of the extra money, however, three quarters has gone to
those with above-average incomes and a third has gone to those in the richest
tenth.
- More than half of all low income households are paying full
Council Tax, noticeably higher than in the mid-1990s.
- The UK has a higher proportion of its population in relative low income
than most other EU countries: of the 27 EU countries, only 5 have a higher
rate than the UK. The proportion of people living in relative low income in the UK is
twice that of the Netherlands and one-and-a-half times that of both France and
Germany.
Child poverty
- The number of children living in low income households was 3.8 million in 2005/06. This represents a drop of 0.6 million since 1998/99.
- Children are one and a third times more likely to live in low income
households as adults.
- A half of all lone parents are in low income, two-and-a-half times the rate for couples with children.
- The government's short term child poverty 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 2005/06 was 3.8 million,
the government is still 0.5 million above its 2004/05 target.
- Half of all the children in low income households have someone in their family
doing paid work.
- Tax credits now help more than a million children in working families out
of low income income, but the number needing such help has risen sharply.
- Although the number of children who are in workless households has fallen by around
a
fifth over the last decade, the UK still has a higher proportion than any
other EU country.
Older people
- The proportion of pensioners living in low income households
has been falling throughout the last decade, from 29% of all pensioners in 1996/97 to 17% in 2005/06. Among single pensioners, the rate has halved over the
period, from 40% to 20%. Pensioners now account for just one sixth of all the
people in low income households.
- Around a third of pensioner households entitled to Pension Credit are not claiming it.
- The proportion of people aged 75 and over who receive
home care to help them live at home has almost halved over
the last decade. County councils and unitary authorities support far
fewer households than either urban or Welsh authorities.
Work
- In 2007, there were 3.6 million people of working age who wanted to be in paid
work but were not. This compares with 4.4 million a decade previously.
Less than half of these people are officially unemployed, with the others
being considered to be 'economically inactive', either because they are able
to started work immediately or because they are not actively seeking work.
Lone parents and those who are sick or disabled usually count as
'economically inactive' rather than 'unemployed'.
- One in five adults with a work-limiting disability are not working but want to. This compares with one in
eighteen of those with no work-limiting disability.
At all levels of qualification, the proportion of people with a work-limiting
disability who lack but want paid work is much greater than for those without a
work-limiting disability.
- Around one in eight young adults aged 16 to 24 were unemployed in
2007. Numbers reduced in the period up to 2001, were stable from 2001 to
2004, and have been rising since then.
- Two-fifths of those getting work are out-of-work again within six
months. More than a quarter of temporary employees would like a permanent job.
- People without qualifications are three times less likely to
receive job-related training compared with those with some qualifications.
Low pay
- Around 5 million adults aged 22 to retirement were paid less than £7 per hour in 2007.
Two-thirds of these were women and a half were part-time workers.
- The proportion of workers aged 22+ who are low paid (£7 an hour in
2007) fell from 2002 to 2005 but has not fallen since. Though still substantial, the pay gap between low paid men and
low paid women has
narrowed.
- In 2007, a quarter of workers earning less than £7 per hour worked in the
public sector.
- The lower a person's qualifications, the more likely they are to be low paid.
For example, half of employees aged 25 to 29 with no GCSES at grade C or above
are paid less than £7 per hour
compared to one in eight of those with degrees or equivalent. All
levels of qualifications appear to make a noticeable difference compared
with the level below.
- In 2007, just one in seven employees earning £7 an hour or less belonged
to a trade union, compared with two-fifths of those earning between £10 and
£20 per
hour.
- Around 15% of working-age households are now in receipt of tax
credits. In total, more than three times as many people are now in receipt of
tax credits as were in receipt of Family Credit a decade ago.
Education
- 11-year-olds: Over the last decade, the proportion of 11 year-olds failing
to reach level 4 at Key Stage 2 has fallen from 37% to 19% for
English, and from 38% to 22% in Maths. These proportions are also falling for
schools with a high number of children from deprived backgrounds, from above
50% to around 30% for both English and Maths.
- 16-year olds: Despite continued progress in the proportion of 16 year-olds
failing to reach the 'headline' level of five GCSEs at grade C or above (from
55% in 1996/97 to 40% in 2006/07), the proportion failing to get five GCSEs at
any level has been stuck at around 10% since 1999/00.
- One in eight 16- to 19-year-olds are not in education, employment or
training, slightly higher than a decade ago.
- 10,000 pupils were permanently excluded from school in 2005/06. This is
a similar number to six years previously.
Health
- Health inequalities associated with class, income or deprivation are pervasive and can be found in all aspects of health, from infant death to the risk of mental ill-health. The limited information on progress over time (infant death, low birthweight) shows no sign that they are shrinking.
- Scotland has by far the highest proportion of premature deaths for
both men and women.
- Adults in the poorest fifth of the income distribution are twice
as likely to be at risk of developing a mental illness as those on average incomes.
- Two-fifths of adults aged 45-64 on below-average incomes have a
limiting long-standing illness or disability, more than twice the rate for those on
above-average incomes.
- Children from manual social backgrounds are 1½ times more likely
to die as infants than children from non-manual social backgrounds.
- Babies from manual social backgrounds are 1¼ times more likely
to be of low birthweight than those from non-manual social backgrounds.
- Teenage motherhood is seven times as common amongst those from
manual social backgrounds as for those from professional backgrounds.
- 5-year-olds in Wales and Scotland have, on average,
more than twice as many missing, decayed or filled teeth as 5-year-olds in the West
Midlands.
Crime
- Both burglaries and violent crimes have halved over the last decade.
- Households with no household insurance are more than three times as
likely to be burgled as those with insurance. Half of those on low income do not
have any household insurance compared with one in five households on average incomes.
Housing
-
5% of people live in overcrowded conditions. Overcrowding is four times as prevalent in social rented
housing as in owner-occupation.
- Around 100,000 households were newly accepted by their local authority as homeless
in 2007. Three-fifths of these did not have dependent children.
Although most prevalent London, homelessness is to be found throughout the
country.
- Although rising, the number of new social housing dwellings is still far
below that required to keep up with demographic change: 42,000 in 2006/07
compared with the 48,000 required to keep up with demographic change.
- Although poorer households remain more likely to lack central
heating, the proportion who did so in 2003/04 was actually less than that for households
on average incomes in 1999/00.
- A quarter of homes in England were classified as non-decent in 2005 compared to
almost a half in 1996.
- 1½ million households in England were classified as being in fuel poverty
in 2005, somewhat higher than in 2004 but much lower than a decade ago.
- The number of mortgage holders in serious arrears is at its lowest level
for fifteen years but, by contrast, court orders for re-possession doubled
between 2004 and 2006.
Disability
- 30% of disabled working-age adults live in low income households, twice
the rate for their non-disabled counterparts.
- The proportion of disabled working-age adults who are in low income
households has, if anything,
increased over the last decade and the gap between disabled and non-disabled
adults has grown.
- Three-quarters of working-age people receiving a key out-of-work benefit
for two years or more are sick or disabled
- 60% of disabled working-age adults are not in paid work compared to only
15% of their non-disabled counterparts. A third of these people - 1
million people - say that they want to work but that they have not been able
to find a job.
- At all levels of qualification, the proportion of disabled people who
lack but want paid work is much greater than for their non-disabled
counterparts.
- A quarter of adults aged 45-64 suffer a longstanding illness or
disability which limits their activity. Two-fifths of all adults aged 45-64
on below-average incomes have a limiting longstanding illness or disability,
more than twice the rate for those on above-average incomes.
Ethnic minorities
- Two-fifths of people from ethnic minorities live in low income households, twice
the rate for White people.
- For all ethnic groups, the proportion of people who are in low income
househlds has fallen at
a roughly similar pace over the last decade.
- Within this, there are big variations by ethnic group.
For example, more than half of people from Bangladeshi and Pakistani ethnic
backgrounds live in low income households. By contrast, a quarter of
people from an Indian ethnic background live in low income households, only a
bit higher than the rate for White people.
- The differences are particularly great for families where at least one
adult is in paid work: in these families, around 60% of Bangladeshis, 40% of
Pakistanis and 30% of Black Africans are in low income households, much higher than
the 10-15% for White British, White Other, Indians and Black Caribbeans.
- A third of working-age Bangladeshi households are
workless, as are a quarter of Pakistani, Black African and Black Caribbean households.
- Around a third of Bangladeshis and Pakistanis are not in paid work
and say that they do not want paid work, a much higher proportion than that
for any other ethnic group. Most Bangladeshi and Pakistani women are
not in paid work.
- Half of Bangladeshis and Pakistanis earn less than £7 per hour.
- At both 11 and 16, deprived White British boys are more likely to fail to reach
educational thresholds than either deprived White British girls or deprived
boys or girls from any other ethnic group.
- Black Caribbean pupils are three times as likely to be excluded from school as White pupils.
- Black young adults are three times as likely as white young adults to be in prison.