Low income by family type
- All the statistics in this indicator relate to numbers of individuals rather than to either numbers of families or number of households. It is very easy to misinterpret the statistics in this indicator. For example, the statement 'almost half of all people in lone parent families are in low income' is not the same as the statement 'almost half of all lone parents are in low income': the former is counting individuals - children as well as adults - whereas the latter is counting families and the two statistics might well be rather different if, for example, larger lone parent families are more likely to be in low income than smaller lone parent families.
- Half of all people in lone parent families are in low income. This is more than double the rate for couples with children.
- Single working-age adults without dependent children are more likely to be in low income than the population on average. They are also more than twice as likely to be in low income as working-age couples without dependent children.
- There is a marked difference in the extent to which low-income people of different family types fall short of the low-income threshold. Three-quarters of the people with very low incomes (below 40% of median household income) are either working-age adults without dependent children or in couples with dependent children. Relatively few are either pensioners or in lone parent families.
The first graph shows the risks of being in low income for people in different family types. Note that a couple (and therefore both of its adults) is classified as a pensioner couple if either of the adults is of pensionable age.
The second graph shows, by family type, the number of people living in low-income households. For simplicity reasons, some of the family types from the first graph have been grouped together. Note that working-age adults living with a pensionable-age spouse are counted in the pensioner family type.
The data source for both graphs is Households Below Average Income, based on the Family Resources Survey (FRS). Income is disposable household income after deducting housing costs. The main low-income threshold is the same as that used elsewhere, namely 60% of British contemporary median household income, with the second graph also showing the numbers below 40% and 50%. The data is equivalised (adjusted) to account for differences in household size and composition. The self-employed are included in the statistics. Note that in 2007 DWP made some technical changes to how it adjusted household income for household composition (including retrospective changes) and, as a result, the data is slightly different than previously published figures. The averaging over three-year periods has been done to improve statistical reliability.
Overall adequacy of the indicator: high. The FRS is a well-established annual government survey, designed to be representative of the population as a whole.
- See the DWP site with their annual Households Below Average Income reports.
- See the DWP site on benefit statistics.
- See the HM Revenue & Customs site on tax credit statistics.
- See the HM Revenue & Customs site on tax credits.
- See the DWP site on Pension Credit.