The Scottish Government

« Previous | Contents | Next »

Listen

Scottish Economic Statistics 2004

B5 chapter five: Household Sector

Households

There are around 2.2 million households in Scotland. Table 5.1 shows the numbers of each type of family unit ²¹ and numbers of persons living in households of each type. In this breakdown, a family unit is defined as a single adult or couple together with any dependent children, so a household can contain more than one family unit. For example, a married couple and their 20-year-old son would be counted as separate "couple without dependent children" and "single without dependent children" units.

Table 5.1: Number of family units and persons in each family type, 2002/03

Over a third of family units consist of one person (of non-pensionable age) without dependent children while just under a fifth are non pensioner couples without dependents. Families consisting of couples with dependent children account for around 16 per cent of all family units, but around one third of all persons living in households. Single parent families account for 6 per cent of all family units, but 26 per cent of all families with children.

Income

Chart 5.1 shows the distribution of household income in Scotland in both 1996/97 and 2002/03. The general distribution for both years is skewed towards lower incomes, with a long tail to the right containing a small number in households with very high incomes. However, compared with 1996/97, the distribution in 2002/03 contains a noticeably smaller peak at the lower end, with more households having been moved further along the distribution. The median weekly equivalised income in Scotland rose by 50 in real terms over this period, from 231 to 281 (at 2002/03 prices).

Chart 5.1: Household income distribution, 1996/97 and 2002/03

Chart 5.2: Real median households income, average annual growth by quintile,1996/97-2002/03

While overall median income in Scotland has risen by 3.3 per cent per annum in real terms since 1996/97, growth has been highest for those in households in the second quintile of the income distribution (4.2% per annum).

Low Income

Table 5.2 shows that 22 per cent of people in Scotland lived in low income households in 2002/03 - defined as having an equivalised net household income after housing costs (AHC) below 60% of the Great Britain median - slightly lower than the 24 per cent in 1996/97. The chance of being below the low income threshold varies by family type. In particular, children in lone parent families were far more likely to live in low incomes households (49%) than children living in couple families (19%). The most significant change since 1996/97 was among single pensioners on the AHC measure. The proportions with low incomes fell from 34 per cent in 1996/97 to 20 per cent in 2002/03.

The above figures refer to the relative income poverty measure, which benchmarks household income against the GB median for the year in question. There is an alternative measure - absolute income poverty - which compares income against the GB median for 1996/97 (up-rated to account for inflation). The absolute indicator complements the relative indicator by allowing for the effect of inflation over time. For all individuals, the relative indicator shows only a slight drop in the proportion with low incomes between 1996/97 and 2002/03. However, the absolute indicator fell from 24 per cent to 14 per cent over the same period. This is because the income levels of those at the lower end of the distribution rose at a greater rate than inflation. However, there was also an overall increase in prosperity between 1996/97 and 2002/03. Therefore a number of families moved above the absolute threshold but stayed below the relative threshold.

Chart 5.3: Components of gross household income by income band, 2002/03

Chart 5.3 shows how the proportion of income which comes from different sources varies according to the level of a household's gross income. In 2002/03, for households with gross weekly income of 700 or more, 89% of all income came from earnings and tax credits, 7 per cent from investments and non-state pensions and only 4 per cent from benefits (excluding the Minimum Income Guarantee (MIG) for pensioners). The composition for those with gross weekly income of less than 150 differed greatly, with only 8 per cent of their income coming from earnings but 45 per cent coming from benefits and 34 per cent from retirement pension and MIG.

Chart 5.4 gives an indication of the change in depth of poverty between 1996/97 and 2002/03, by showing the number of persons living in households below the 50%, 60% and 70% of median AHC income thresholds.

Chart 5.4: Number of persons living in households with income below the 50%, 60% and 70% median income ¹ thresholds, 1996/97 and 2002/03

The number of pensioners living in low income fell over period, the reduction being largely in those living just below the main 60% threshold, with little changes in the number of those living below 50% or between the 60% and 70% thresholds.

The numbers of children living in low income also fell over the period, however for this group the decrease was both in those just below the 60% threshold and those living below the 50% threshold. There was little change in the numbers of those just above the threshold. There was a similar picture for working aged adults with dependent children.

The numbers of working age adults without children living in low income increased over the period. Most of this increase was in the number living below the 50% threshold.

Benefits and Tax credits

Table 5.3 shows that 550 thousand people (17% of the working age population) in Scotland were in receipt of one or more of a range of key benefits at February 2004. Within Scotland, Glasgow had the highest rate of recipients of key benefits at 29 per cent of the working-age population, with Orkney and Aberdeenshire having the lowest rates (8% and 9% respectively). The largest group of claimants (64%) were claiming benefits because of sickness and/or disability - 355 thousand, 11 per cent of the working-age population. Around a fifth of all working age claimants were claiming unemployment-related benefits - 3 per cent of all working age people. Tables 5.4 shows the number of recipients of the main individual benefits and tax credits in Scotland, together with the proportion of the population.

The introduction of tax credits in recent years has extended state support to working people, in particular to those with children or in low-paid jobs. At April 2004, 430 thousand families were receiving the Child Tax Credit or Working Tax Credit or both.

Household Expenditure

Average household expenditure in Scotland was 365 per week in 2002/03 (Table 5.6), around 35 lower than for the United Kingdom as a whole. In most categories, spending was higher for the UK, including housing, fuel and power on which weekly spending was 4 higher than in Scotland. However, spending on alcoholic drinks, tobacco and narcotics was 2 a week higher in Scotland than in the UK.

Table 5.2: Percentage of individuals below 60% GB median income1 by family type, before and after housing costs, 1996/97 and 2002/03

Table 5.3: Working Age Claimants of Key Benefits1 by Statistical Group and Local Authority, Scotland, February 20042

Table 5.4: Recipients of the main benefits, Scotland, 20041,2

Table 5.5: Recipients of Tax Credits, Scotland, April 2004

Table 5.6: Average weekly household expenditure, Scotland and UK, 2002/03

« Previous | Contents | Next »