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Statistics Publication Notice
HOUSEHOLDS BELOW AVERAGE INCOME 2003/04

ISBN 0 7559 3973 5 (Web publication only)
30 ^th March 2005

A SCOTTISH EXECUTIVE NATIONAL STATISTICS PUBLICATION

This document is also available in pdf format (76k)

The Scottish Executive has today released estimates of the proportions and numbers of children, working age adults and pensioners living in low income households in Scotland. These estimates are derived from the Department for Work and Pensions' Households Below Average Income (HBAI) analysis, which is based on the Family Resources Survey (FRS).

Key results for those living in households below 60% of both the relative GB median (current median income) and absolute GB median (median at 1996/97 fixed in real terms) after housing costs are:

Children

• In 1996/97 - the baseline year against which progress is measured - an estimated 370,000 children (33%) were living in low income households. In absolute terms, this had fallen to 160,000 children (15%) by 2003/04. The equivalent number of children in relative low income households in 2003/04 was 260,000 (25%).

Working Age Adults

• In 1996-97, an estimated 600,000 working age adults (20%) were living in low income households. In absolute terms this had fallen to 380,000 working age adults (13%) by 2003/04. The equivalent number of working age adults in relative low income households in 2003/04 was 540,000 (18%).

Pensioners

• In 1996/97, an estimated 260,000 pensioners (30%) were living in low income households. In absolute terms this had fallen to 70,000 pensioners (8%) by 2003/04. The equivalent number of pensioners in relative low income households in 2003/04 was 160,000 (18%).

All individuals

• In 1996/97, an estimated 1,230,000 individuals (25%) were living in low income households. In absolute terms this had fallen to 600,000 individuals (12%) by 2003/04. The equivalent number of individuals in relative low income households in 2003/04 was 960,000 (19%).

Change in Median Income

• There has been an increase of 24% (£58) in GB median income 'After Housing Costs', from £239 to £297 per week, in real terms, between 1996/97 and 2003/04. Consequently, the 60% low income threshold, which is used to derive the relative low income poverty figures, has increased by £35 per week in real terms, from £144 to £178 for a couple with no children.

Headline Results

Table 1 - Proportion and Number of Individuals in Absolute Low Income Households, below 60% of GB Median Income in 1996/97, Scotland
Table 2 - Proportion and Number of Individuals in Relative Low Income Households, below 60% of GB Median Income, Scotland

Alternative Thresholds

Table 3: Proportion and number of children living in households below 50% and 60% of the mean income thresholds in Scotland over the period 1994/95 to 2003/04 relative to the 1996/97 GB mean incomes in real terms (Absolute measure)
Table 4: Proportion and number of children living in households below 50%, 60% and 70% of the median income thresholds in Scotland over the period 1994/95 to 2003/04 relative to the 1996/97 GB median incomes in real terms (Absolute measure)
Table 5: Proportion and number of children living in households below 50% and 60% of the mean income thresholds in Scotland over the period 1994/95 to 2003/04 relative to the relevant year's GB mean income (Relative measure)
Table 6: Proportion and number of children living in households below 50%, 60% and 70% of the median income thresholds in Scotland over the period 1994/95 to 2003/04 relative to the relevant year's GB median income (Relative measure)
Table 7: Proportion and number of working age people living in households below 50% and 60% of the mean income thresholds in Scotland over the period 1994/95 to 2003/04 relative to the 1996/97 GB mean incomes in real terms (Absolute measure)
Table 8: Proportion and number of working age people living in households below 50%, 60% and 70% of the median income thresholds in Scotland over the period 1994/95 to 2003/04 relative to the 1996/97 GB median incomes in real terms (Absolute measure)
Table 9: Proportion and number of working age people living in households below 50% and 60% of the mean income thresholds in Scotland over the period 1994/95 to 2003/04 relative to the relevant year's GB mean income (Relative measure)
Table 10: Proportion and number of working age people living in households below 50%, 60% and 70% of the median income thresholds in Scotland over the period 1994/95 to 2003/04 relative to the relevant year's GB median income (Relative measure)
Table 11: Proportion and number of pensioners living in households below 50% and 60% of the mean income thresholds in Scotland over the period 1994/95 to 2003/04 relative to the 1996/97 GB mean incomes in real terms (Absolute measure)
Table 12: Proportion and number of pensioners living in households below 50%, 60% and 70% of the median income thresholds in Scotland over the period 1994/95 to 2003/04 relative to the 1996/97 GB median incomes in real terms (Absolute measure)
Table 13: Proportion and number of pensioners living in households below 50% and 60% of the mean income thresholds in Scotland over the period 1994/95 to 2003/04 relative to the relevant year's GB mean income (Relative measure)
Table 14: Proportion and number of pensioners living in households below 50%, 60% and 70% of the median income thresholds in Scotland over the period 1994/95 to 2003/04 relative to the relevant year's GB median income (Relative measure)

Headline Results using previous Grossing Regime

Table 15: Proportion and Number of Individuals in Absolute Low Income Households, below 60% of GB Median Income in 1996/97 using previous grossing regime, Scotland
Table 16: Proportion and Number of Individuals in Relative Low Income Households, below 60% of GB Median using previous grossing regime, Scotland

Background Notes:

1. All data are taken from the Households Below Average Income dataset, Department for Work and Pensions.

2. The relative low income measure compares against the GB median in the same year. The absolute measure compares against the median in the baseline year, 1996/97, adjusted to remove the effects of inflation. 1996/97 is the baseline against which progress is measured. Changes in 'relative' low-income indicators depend on how changing incomes at the lower end of the distribution compare with income growth for the rest of the population. 'Relative' low-income counts fall if income growth at the lower end outstrips overall income growth. Where reductions are reported for 'relative' low-income indicators, these are on a smaller scale to those seen for the 'absolute' indicators, as a large part of the income growth at the bottom of the distribution is absorbed in 'keeping up' with the population as a whole.

3. The percentages show the proportion of the population that fall below the threshold in the year in question. Therefore, due to changing demographics, the same number of persons one year may represent a different proportion to the same number in a previous year.

4. The income used in these 'low income' statistics is that of the whole household in which the person is living, and the income is net income from all sources, including earnings, tax credits, benefits, income from grants, pensions, investments etc. In order to allow comparisons of living standards between different household types, income is adjusted to take into account variations in the size and composition of the household in a process known as equivalisation. This adjustment reflects the fact that a family of several people requires a higher income than a single person in order for both households to enjoy a comparable standard of living. The key assumption is that all individuals in the household benefit equally from the combined (equivalised) income of the household.

5. The figures are estimates based on a sample survey and are therefore subject to sampling variation. Extreme caution should be exercised in the interpretation of small year-on-year fluctuations. Identification of trends must be based on data for several years. As the Scottish Executive has funded a doubling of the Scottish sample since 2002/03, the Scottish figures from 2002/03 onwards should be less prone to fluctuation within key trends than those for earlier years.

6. The Department for Work and Pensions have published today a much fuller report covering mainly GB, but with some limited results for Scotland. A copy of DWPs News Release can be found on the DWP website, http://www.dwp.gov.uk/asd/frs/ .

7. The Household Below Average Income data is grossed up to produce estimates for the overall population. The Department for Work and Pensions announced the final grossing regime in February 2005, following the recent review. This new grossing regime improves the accuracy of regional-level counts drawn from the FRS. The HBAI figures for 2003/04 use the new grossing regime, and the full HBAI series from 1994/95 has been revised in line with the new grossing regime. Headline figures for Scotland based on the previous grossing regime (but incorporating changes in the population counts following the 2001 Census) are included within this SPN (Tables 15 and 16). Further information about the new grossing regime is available at the DWP website http://www.dwp.gov.uk/asd/frs/

8. Public enquiries (non-media) about the information contained in this Statistical Publication Notice should be addressed to Income Statistics, Office of the Chief Economic Advisor, Scottish Executive, St Andrew's House, Regent Road, Edinburgh, EH1 3DG (telephone 0131 244 2583 or e-mail

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