Low Income
Fewer children in poverty in recent years
Proportion of children living in households below 60 per cent of median income
In 2003-04, 17 per cent of the population in Great Britain lived in low income households (before deduction of housing costs).
This proportion was fairly static during the 1960s, 1970s and early 1980s, fluctuating between 10 and 15 per cent. It then rose steeply from the mid-1980s to reach a peak of 21 per cent in the early 1990s. During the 1990s the proportion declined in most years, though it remained well above the early 1980s level.
Children are disproportionately present in low income households. In 2003/04, 2.6 million children were living in low income households (before deduction of housing costs). This is 600,000 fewer than in 1996/97. After rising to a peak of 27 per cent in the early 1990s, the proportion fluctuated. It fell between 1997/98 and 2000/01, and then levelled off at 21 per cent for each of the four years to 2003/04.
If housing costs are deducted from income, changes in the 1990s are less marked, though there is a gradual fall in recent years. On this basis, there were 3.5 million children living in low-income households in 2003/04 which is 700,000 fewer than in 1996/97. Since 1994/95 the level has consistently been between 7 and 9 percentage points higher than on the ‘income before housing costs’ measure.
Children in lone-parent families, children of couples where the parents work only part time or are unemployed, those in families with three or more children, or with a mother under 30 were all at higher risk of low income than other groups of children.
Other groups of people with an above average risk of low income included workless families (those with no working age adults in work), older pensioner couples, households headed by a member of a minority ethnic group, disabled people, local authority or housing association tenants, those with no educational qualifications and those living in Inner London.
Source: Households Below Average Income (HBAI) series, Department for Work and Pensions. Data from 1979 to 1993/94 are for UK and taken from the Family Expenditure Survey (estimates are not available for the 1981, 1983 and 1985 datasets); from 1994/95 data are for GB from the Family Resources Survey.
Notes: Low income - in this summary, the threshold generally adopted to define low income is 60 per cent of median equivalised household disposable income.
Equivalisation – in analysing the distribution of income, household disposable income is usually adjusted to take account of the size and composition of the household.
Before and After Housing Costs - in the HBAI analysis on which most of this summary is based, disposable income is presented both before and after the further deduction of housing costs.
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Redistribution of Household Income