Statistics release: households below average incomes
1 Jul 2014 02:53 PM
The number of
people in relative poverty has fallen by 100,000 over the past year, new annual
statistics (Household Below Average Income (HBAI)) out yesterday (1 July 2014)
show.
Despite the recession and experts’ predictions to
the contrary, the proportion of all individuals in relative poverty stayed
statistically level, while in-work poverty fell with 200,000 fewer working age
adults in families where someone works in poverty.
The
percentage of individuals in relative poverty is at the lowest level since the
1980s, while inequality remained flat since falling from an all-time record
seen in 2009/10.
Median real incomes remained broadly unchanged between
2011/12 and 2012/13 (up £2 to £440 under CPI) and the
percentage of those in absolute low income is still near historic
lows.
Relative poverty has fallen in the UK since 2009/10,
despite rising across Europe, including in France and Germany.
Under separate statistics out yesterday, pensioner
incomes have also risen in real terms for the first time in 3
years.
Work and Pensions Secretary, Iain Duncan Smith
said:
Despite the deepest debt-fuelled recession in living
memory when £112 billion was wiped off the economy, we have protected the
most vulnerable families from falling behind with 300,000 fewer children in
poverty since 2010.
Today’s figures underline the need to stick to the
government’s long-term economic plan of restoring a strong economy that
creates jobs, and a tax and welfare system that helps people into work and
makes work pay.
Despite the tough economic climate, employment has
increased by nearly 1.7 million since 2010 and there are now record numbers of
people in work and a record rate of women in work. These employment increases
are not reflected in the HBAI statistics, which is likely to be due
to uncertainty from being based on a sample survey.
Recent changes in the definition of disability means
that this set of figures are not directly comparable with
previous HBAI statistical releases, and shouldn’t be compared
with previous years.
The
government remains committed to making work pay. Welfare reforms with the
introduction of the Universal Credit will improve the lives of some of the
poorest families in our communities, making 3 million households better off and
lifting up to 300,000 children out of poverty.
These figures do not take into account the further
reductions in poverty from the expected increase of 300,000 additional people
in work due to Universal Credit.
The
government remains committed to the goal of ending child poverty in the UK by
2020. We want to break the cycle of disadvantage based on the principle that
where someone starts in life should not determine where they end up. With a
child in a workless family around 3 times as likely to be in relative poverty
than a family where at least 1 parent works, work is the best route out of
poverty.
The
government recently published the Child Poverty
Strategy which sets out what is being done to tackle the root causes
of child poverty such as worklessness, educational failure and family
breakdown.
In
targeting education as a route out of poverty, we are giving disadvantaged
pupils an additional £14,000 throughout their school career – a
£2.5 billion commitment this year through the Pupil Premium. We are
providing more nursery and pre-school provision, this includes 260,000
disadvantaged 2 year-olds receiving 15 hours a week at nursery as well as 20%
more hours of funded pre-school for all 3 and 4 year olds
Since 2010 the number of children aged under 16 in
workless households has fallen by 290,000 and poor children are also doing
better than ever at school, with the proportion of children on free school
meals getting 5 good GCSEs including English and maths increasing from 31% in
2010 to 38 per cent in 2013.
The
government has taken action to support families, including the largest ever
increases in the income tax personal allowance, funding successive council tax
freezes and increasing the National Minimum Wage. With the economy growing we
have just seen the largest rise in employment for over 40 years and
unemployment is falling.
More information
Read the latest Households below average income (HBAI): 1994/95 to
2012/13 statistics
Relative poverty is the most commonly used poverty line
– 60% of median income.
Absolute poverty gives the number of individuals with
income below 60% of median income in 2010/11, adjusted for
inflation.
HBAI figures are based on a survey, and therefore
subject to uncertainty – the falls noted above are not considered
statistically significant.
The
Consumer Price Index (CPI) remains a better measure of inflation than the
Retail Price Index (RPI). The RPI is no longer a National Statistic,
and is thought to overstate the effect of inflation.
Median incomes used to calculate relative
poverty
Weekly median income (before housing costs) in 2012/13
compared to 2011/12
For
a couple with no children saw no change at £440 a week.
For
a single person with no children saw no change at £295 a
week.
For
a couple with two children fell £1 to £673 a week.
For
a single person with two children saw no change at £528 a
week.
Weekly poverty threshold (before housing costs) in
2012/13 compared to 2011/12
For
a couple with no children saw no change at £264 a week.
For
a single person with no children saw no change at £177 a
week.
For
a couple with two children saw no change at £404 a week.
For
a single person with two children saw no change at £317 a
week.
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