Annex A
OFFICIAL STATISTICS ON POVERTY (LOW INCOME)
IN SCOTLAND 2005-06
All
The number of individuals in relative low income
households before housing costs fell by 11%, from 980,000 in 1998-99
to 880,000 in 2005-06, a fall of 100,000.
After housing costs numbers fell by 13%, from
1,130,000 in 1998-99 to 990,000 in 2005-06, a fall of 140,000.
Children
The number of children in relative low income
households before housing costs has fallen from 300,000 in 1998-99
to 210,000 in 2005-06 (21% of all children), a fall of 90,000.
After housing costs the number has fallen by
26% from 330,000 in 1998-99 to 250,000 in 2005-06 a fall of 80,000.
190,000 children have been lifted from absolute
poverty since 1998-99 (330,000 to 140,000), reducing absolute
child poverty by 57% (after housing costs).
Working age adults
The number of working age adults in relative
low income households has increased by 4% since 1998-99, from
450,000 to 470,000 in 2005/06—before housing costs.
After housing costs the number again has increased
by 3%, from 570,000 in 1998-99 to 590,000 in 2005-06 (19% of all
working age adults).
170,000 working age adults have been lifted
from absolute poverty since 1998-99 (after housing costs) (570,000
to 400,000), reducing absolute working age poverty from 19% to
13%—a reduction of 29%.
Pensioners
The number of pensioners in relative low income
households before housing costs has fallen by 17%, from 230,000
in 1998-99 to 190,000 in 2005-06 (20% of all pensioners), a fall
of 40,000.
After housing costs the number has fallen by
34% from 230,000 in 1998-99 to 150,000 in 2005-06 (16% of all
pensioners), a fall of 80,000.
170,000 pensioners have been lifted from absolute
poverty since 1998/99 (after housing costs), reducing absolute
pensioner poverty from 27% to 6%—a reduction of 75%.
What is the measure of low income?
Individuals are defined as living in low income
if their adjusted net disposable household income is below 60%
of the GB median. We publish low income estimates on a "before
housing costs" (BHC) and "after housing costs"
(AHC) basis.
The median is the income value which divides
a population, when ranked by income, into two equal sized groups.
This measure is most commonly used because the mean (average)
can be skewed by households with very high incomes. We use household
income rather than individual income as the living standard of
an individual may depend on the income of other members of the
household. For example, a non-working person may live with a high
earning partner; so both will have a high standard of living.
This assumes that all individuals in the household benefit equally
from the combined income of the household.
What is the difference between relative and absolute
low income?
We use two headline measures—relative
and absolute low income households—to define and measure
those living in low income over time.
The relative low income measure compares household
income against the GB median in the same year. 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.
The absolute measure compares against the median
in the baseline year, 1996-97, adjusted to remove the effects
of inflation. The new child poverty measure uses a 1998-99 baseline.
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 lower end of the distribution
is absorbed in keeping up with the population as a whole.
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