WIREDGOV

Poverty in Scotland
Poverty in Scotland has increased in 2012/13. While the rate of poverty increased for all groups, the largest increase was in the rate of child poverty.

Scotland’s Chief Statistician today released the latest Poverty and Income Inequality Statistics 2012/13. The figures show relative poverty, before housing costs (BHC) in Scotland has increased to 16 per cent for the whole population, a 2 percentage point increase on the previous year. In 2012/13 there were 820,000 people living in poverty, 110,000 more than the previous year. 

 

Relative child poverty (BHC), increased to 19 per cent in 2012/13, up from 15 per cent the previous year. In 2012/13, there were 180,000 children living in relative poverty in Scotland, 30,000 more than in 2011/12. This reverses the trend of declining child poverty over recent years.

 

Relative poverty (BHC) among working age adults in 2012/13 was 15 per cent, an increase from 13 per cent the previous year. This brings the number of working age adults in relative poverty to 480,000, an increase of 70,000 compared with 2011/12.

 

Relative poverty (BHC) among pensioners in 2012/13 was 15 per cent, an increase from 14 per cent the previous year. There were 150,000 pensioners in relative poverty in 2012/13, 10,000 more than the previous year.

In-work poverty, where families have at least one adult in employment but household income is below the poverty threshold, increased in Scotland in 2012/13.

• Six in ten children in poverty in Scotland in 2012/13 were living in families where at least one adult was in employment. This is an increase from five in ten children in in-work poverty in 2011/12, and continues the slow increase in the number of children in poverty in Scotland living in households in employment.
• In 2012/13, over half of all working age adults in poverty were in households where at least one adult was in employment. This continues the gradual increase in the number of working age adults in in-work poverty in Scotland.

Income in Scotland
This year’s figures present a complex picture. Overall, income in 2012/13 fell, with a fall in the Scottish median income for the third consecutive year. In 2012/13 Scottish equivalised median household income was £23,000. Household incomes for working age adults and families with children fell in 2012/13, while that for pensioners increased.

In 2012/13, benefits were uprated by 5.2 per cent (CPI), while the RPI inflation rate was 3.1 per cent, and median earnings in Scotland increased by 2.8 per cent. Earnings for those at the median income in Scotland increased overall in 2012/13, but fell for those on the lowest incomes, with little or no earnings growth for those in lower paid employment.

There are a number of factors which could be influencing the continued fall in real earnings including changes in hours worked, low wage growth, the increase in the personal tax allowance, changes in the labour market, behavioural changes in response to tightening eligibility and conditionality under welfare reform, and behavioural change in response to the higher tax rate changes announced for April 2013.

A number of benefit changes, although having different effects on different families, resulted in smaller growth in real benefit income than may have been expected from the level at which benefits were uprated. While benefits were uprated in 2012/13 by CPI, eligibility and conditionality have been tightened under welfare reform, meaning fewer families, especially those in employment, are in receipt of benefits and tax credits.

In 2012/13, there was a fall in household income for working families with children. Families without children may be more likely to increase the number of hours worked and to have greater flexibility in the labour market. For families with children in employment, the reduced entitlement to tax credits has contributed to a fall in household incomes for those with lower earnings who were unable to increase the number of hours worked. At April 2013, there were significantly fewer children in families in Scotland in receipt of in-work tax credits, compared with April 2012. This is reflected in an increase inchildren in ‘in-work’ poverty in the latest year, where families are in employment but household incomes remain below the poverty threshold

In 2012/13, there was little change in income inequality. The proportion of income received by the lowest 3 income deciles remained at 14 per cent. This proportion has remained at between 13 and 14 per cent since 1998/99.