The Scottish Government

« Previous | Contents | Next »

Listen

SCOTTISH HOUSEHOLDS BELOW AVERAGE INCOME, 2006/07

POVERTY IN SCOTLAND

This publication presents annual estimates of the proportion and number of children, working age adults and pensioners living in low income households in Scotland. It presents progress towards UK and Scotland Government targets to reduce poverty.

All figures are derived from the Department for Work and Pensions' Family Resources Survey, Households Below Average Income datasets. The data being published for the first time here is from the Households Below Average Income 2006/07 dataset. The Department for Work and Pensions have published equivalent figures for the UK.

Progress towards the Scottish Government's target to reduce poverty is presented below. The following two pages focus on the UK Government Target to eradicate child poverty by 2020. Pages 4 and 5 present further information on the number and proportion of people in poverty in Scotland. The methodology and definitions of key concepts are explained on pages 6 to 8.

Further analysis of these low income poverty figures, and progress towards the Scottish Government Solidarity Target, will be published on the Income and Poverty website in June 2008.

Scottish Government National Indicator 14: Decrease the proportion of individuals living in relative low income poverty

In 2006/07 there were 840,000 individuals living in relative low income poverty before housing costs. This represents 17% of the Scottish population.

Of the 840,000 individuals living in relative low income poverty, 210,000 are children, 440,000 are working age adults and 180,000 are pensioners ¹.

Chart 1: Proportion of individuals in poverty

Relative poverty rates after housing costs are slightly higher (950,000 individuals or 19% of the population).

Child Poverty

The child poverty measure forms the basis of the UK Government target to halve child poverty by 2010, from a 1998/99 baseline, and eradicate it by 2020. The measure consists of 3 tiers:

Tier 1, Absolute low income: Number and proportion of children in households whose equivalised income before housing costs is below 60% of inflation adjusted median ² income in 1998/99. This is a measure of whether the poorest families are seeing their incomes rise in real terms.

Tier 2, Relative low income: Number and proportion of children in households whose equivalised income before housing costs is below 60% of median ² income in the same year. This is a measure of whether the poorest families are keeping pace with the growth of incomes in the economy as a whole.

Tier 3, Material deprivation and low income combined: Number and proportion of children that are both materially deprived and are in households whose equivalised income before housing costs is less than 70% of the median ² in the current year. This is to provide a wider measure of children's living standards.

For more information about equivalence scales, absolute and relative low income measures, and how material deprivation is calculated, please see 'Notes, definitions and further reading' on pages 6 to 8.

In 2006/07 there were 120,000 children in Tier 1, 210,000 children in Tier 2 and 160,000 children in Tier 3. Table 1 on the following page provides more detail.

Chart 2: Child poverty in Scotland, 1998/99 - 2006/07

Table 1: Child poverty in Scotland, 1994/95 - 2006/07

Tier 1: ABSOLUTE (below 60% of GB median in 1998/99 adjusted for inflation) low income before housing costs.

Tier 2: RELATIVE (below 60% of UK median in the same year) low income before housing costs.

Tier 3: Relative low income (below 60% of UK median in the same year) and material deprivation combined.

Please see the notes on pages 6 to 8 for a full explanation of the methodologies used.

Note that the material deprivation suit of questions was not included in the Family Resources Survey before 2004/05. The 1998/99 figures for Combined Low Income and Material Deprivation were estimated assuming that the reduction in Tier 3 poverty between 1998/99 and 2005/06 was equivalent to the fall in Tier 2 poverty in the same time period.

The main points about child poverty in Scotland are:

• The proportion of children in tier 1 has fallen from 28% in 1998/99 to 12% in 2006/07. This is a decrease of 61% ³.

• Ten thousand fewer children were in tier 1 in 2006/07 than in 2005/06.

• The target to halve child poverty by 2010 has already been met for Tier 1 in Scotland.

• The proportion of children in tier 2 has fallen from 28% in 1998/99 to 21% in 2006/07. This is a decrease of 28%.

• There was no change in the number of children in tier 2 between 2005/06 and 2006/07.

• In order to meet the target to halve child poverty by 2010 (from a 1998/99 baseline), 60,000 more children need to be lifted from Tier 2 in the next 3 years.

• The proportion of children in tier 3 has fallen from an estimated 19% in 1998/99 to 16% in 2006/07. This is a decrease of 24%.

• Thirty thousand more children were in tier 3 in 2006/07 than in 2005/06. The fluctuation from 16% to 13% and back again in the past 3 years demonstrates the high variability of this measure: caution should be exercised when interpreting year on year changes.

• In order to meet the target to halve child poverty by 2010, 50,000 more children need to be lifted from Tier 3 in the next 3 years.

All Individuals

• 10% of individuals are in absolute poverty before housing costs compared to 12% after housing costs.

• 17% of individuals are in relative poverty before housing costs compared to 19% after housing costs.

Working Age Adults

• 10% of working age adults are in absolute poverty before housing costs compared to 12% after housing costs.

• 14% of working age adults are in relative poverty before housing costs compared to 18% after housing costs.

Pensioners

• 11% of pensioners are in absolute poverty before housing costs compared to 7% after housing costs.

• 20% of pensioners are in relative poverty before housing costs compared to 15% after housing costs.

Table 2: ABSOLUTE low income (below 60% of 1998/99 GB median adjusted for inflation) in Scottish households

Note: Due to rounding, the estimates for children, working age adults and pensioners may not sum to the total for all individuals.

Table 3: RELATIVE low income (below 60% of UK median in the same year) in Scottish households

Note: Due to rounding, the estimates for children, working age adults and pensioners may not sum to the total for all individuals.

« Previous | Contents | Next »