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 2006/07. In that year, the 60% threshold was worth: £112 per week for single adult with no dependent children; £193 per week for a couple with no dependent children; £189 per week for a single adult with two dependent children under 14; and £270 per week for a couple with two dependent children under 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 2006/07, 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 a million compared with two years
previously. The increases over the last two years follow six uninterrupted years of
decreases from 1998/1999 to 2004/05 and are the first increases since 1996/97.
- The number of people in low income is still lower (just) than it was during the
early 1990s but much greater than in the early 1980s.
- The proportions of children and pensioners who are in low-income households
are both lower than a decade ago. 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 family 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 over the last decade, but that for working-age adults without children
has fallen considerably behind.
- Half of all people in social housing are in low-income households 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 4 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 France.
Child poverty
- The number of children living in low-income households was 3.9 million in 2006/07. This represents a drop of 0.5 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 2006/07 was 3.9 million,
the government is still 0.6 million above its 2004/05 target.
- More than 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 but the number needing such help has risen sharply.
- Although the number of children who are in workless households is somewhat
lower than a decade ago, the UK still has a higher proportion than any other EU country.
Older people
- Until the most recent year, the proportion of pensioners living in low-income households had been falling throughout the last decade, from 29% of all pensioners in 1996/97 to 19% in 2006/07. 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.
- A third of all 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 2008, there were 3.9 million people of working age who wanted to be in paid work but were not. The number has been rising since 2005, when it
stood at 3.4 million. 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
sixteen 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 seven young adults aged 16 to 24 were unemployed in 2008. This proportion has been rising since 2004.
- Throughout most of the last decade, around two-fifths of those losing
their job had had that job for less than six months. 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 4½ million adults aged 22 to retirement were paid less than £7 per hour in 2008.
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
2008) fell by around a million between 2002 and 2005 but has risen slightly
since then. Though still substantial, the pay gap between low-paid men and low-paid women has narrowed.
- In 2008, 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
were paid less than £7 per hour
in 2008 compared to one in ten of those with degrees or equivalent. All
levels of qualifications appear to make a noticeable difference compared
with the level below.
- In 2008, 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, three times as many people are now in receipt of
tax credits as were in receipt of its equivalent (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 substantial progress in the proportion of 16 year-olds
failing to reach the 'headline' level of five GCSEs at grade C or above (from
54% in 1997/98 to 36% in 2007/08), around 10% still fail to obtain five GCSEs at
any level.
- One in eight 16- to 19-year-olds are not in education, employment or
training, slightly higher than a decade ago.
- 9,000 pupils were permanently excluded from school in 2006/07. This is
a similar number to seven 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.
- Men aged 25-64 from routine or manual backgrounds are twice as likely to
die as those from managerial or professional backgrounds and there are also
sizeable differences for women. 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 somewhat more likely to be of low birthweight than those from non-manual social backgrounds.
- Teenage motherhood is eight 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.
- The number of newly homeless households has reduced by two-thirds since
2004.
Although most prevalent London, homelessness is to be found throughout the
country.
- Although now rising sharply, the number of new social housing dwellings
over the last decade has been well below that 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 (the latest data available) 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 2006 compared to almost a half a decade earlier.
- Both overall and among those in low income, single-person households are much more likely to be in fuel poverty than other household types.
- Mortgage re-possessions have been rising sharply since 2004 and, by 2008,
were six times the level of 2004. They are now back to the levels of 1994.
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
is higher than a decade ago 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
20% 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
households 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 55% of Bangladeshis, 45% 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 Black Caribbean and Black African 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.