The data for this measure comes from the Family Resources Survey (FRS), which is used to calculate the Households Below Average Income (HBAI) statistics.
The FRS is a continuous household survey which collects information on a representative sample of private households in the UK. Detailed information is recorded on respondents’ income.
Household income (before housing costs) is taken from all sources of all household members, including dependants. Main income sources include:
- gross income from employment, or profits from self-employment (after deductions like income tax, National Insurance, student loan repayments, and contributions to workplace, stakeholder and personal pension schemes)
- benefits and tax credits
- occupational and private pensions
- maintenance payments
- educational grants, scholarships, student loans and parental contributions
Certain forms of income in kind are also counted – for example, free school meals, breakfast or milk, and free TV licences for pensioners aged 75 years and over.
Total household income is calculated after deducting council tax, maintenance and child support payments (which are deducted from the income of the person making the payment), and parental contributions to students living away from home.
Income after housing costs is calculated by deducting the following from the household’s total income:
- rent (gross of housing benefit)
- water rates, community water charges and council water charges
- mortgage interest payments
- structural insurance premiums (for owner occupiers)
- ground rent
- service charges
The survey is conducted in respondents’ homes face to face with an interviewer.
In the latest 3-year period, 2014/15 to 2016/17, the FRS sample consisted of almost 60,000 households in the UK. It has a financial year survey period with surveys conducted throughout the year and is cross-sectional (a ‘snapshot’ of households over the year). Individuals are not followed up for later surveys.
The ‘head of the household’, or ‘household reference person’ is classified as the householder with the highest income.
Households where every resident over the age of 16 responds to the questions are classed as fully co-operating. Only households with full co-operation are included in the analysis. This may introduce some error, as the characteristics of individuals living in households which do not respond fully may be different to those who do fully co-operate. Therefore, the sample will be more representative of those who do respond fully. Overall, 54% of households fully co-operated with the survey, meaning there was a sample size of 19,387 households in 2016/17.
Also, the FRS only covers private households, so individuals who live in communal accommodation (for example, care homes) or have no fixed address (for example, who are homeless) are not included in this data.
Estimates are subject to sampling error and non-sampling bias.
As the data is presented as a 3-year average, no statistical tests have been performed to determine whether the estimates taken from the survey are statistically significantly different from one another.
In other words, as the results are based on a sample of the population, without further testing it isn’t possible to determine whether any differences observed would likely be seen across the entire population. This is important to consider and means that conclusions around differences between groups cannot be drawn. However, the data is still useful because it indicates where differences between ethnic groups might exist.
The value for income has been ‘equivalised’ to ensure results can be compared. Equivalisation adjusts incomes for household size and composition, taking an adult couple with no children as the reference point. For example, the process of equivalisation would adjust the income of a single person upwards, so their income can be compared directly to the standard of living for a couple.
Weighting is used to adjust the results of a survey to make them representative of the population and improve their accuracy.
Suppression rules and disclosure control
Any values based on fewer than 100 responses have been suppressed.
Values are given to the nearest whole percentage. Due to this rounding, some figures may not add up to 100.