Low income

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1. Main facts and figures

  • in 2014/15, the median (roughly, middle) UK income for a couple with no children, before housing costs were paid, was £26,000; after housing costs were paid, the median UK income was £22,000

  • households headed by a White person had lower rates of persistent low income than households headed by someone coming from any other ethnic group

  • the highest rates of persistent low income were found in households headed by people coming from the Black, Asian or Other ethnic groups

Things you need to know

Understanding Society is a ‘sample survey’. It collects information from a random sample of the population to make generalisations (reach 'findings') about the total population.

As with all surveys, the estimates from Understanding Society are subject to a degree of uncertainty as they are based on a sample of the population. The degree of uncertainty is greater when the number of respondents is small, so it will be highest for ethnic minority groups.

Smaller numbers of survey respondents from ethnic minority backgrounds mean that estimates for all Other ethnic groups are more unreliable than estimates for White people (which includes White British and White ethnic minorities).

Results taken from a low number of responses are more likely to be affected by statistical variation, so observed changes might not reflect real differences. As such, caution is needed when interpreting short-term trends in the data, especially for sub-groups (for example, a specific ethnic group, age group and gender).

What the data measures

This data measures households which are ‘persistently low income’ – that is, they’ve been categorised as low income for 3 out of the 4 years surveyed.

Households are grouped according to the income and ethnicity of the highest earner, also referred to as the head of the household.

This measure compares a household’s income to the median income of the UK (the UK’s median income is the income in the middle of the range of all incomes from lowest to highest).

Two types of median income are used in this measure:

  • median income before housing costs are paid (in the UK in 2014/15, this was £26,000)
  • median income after housing costs are paid (in the UK, in 2014/15 this was £22,000)

Households are classed as being in low income if they live on less than 60% of the UK’s median income.

The data shows who falls beneath this threshold both before and after housing costs have been paid.

The before housing costs (BHC) and after housing costs (AHC) show how the cost of housing has a greater or lesser impact on different groups. For example, pensioners, who may have paid off their mortgages, tend to spend a smaller proportion of their income on housing than people of working age.

For people of working age the picture is different. Given that the UK’s median income before housing costs (BHC) was £26,000 in 2014/15, a working age person earning £17,000 would be earning more than 60% of median income BHC and would not be classed as low income.

However, after housing costs (AHC) the UK’s median income 2014/15 was £22,000. The same person, paying a monthly rent of £500 out of their salary of £17,000, would then be on an income of £11,000, putting them below the threshold for low income.

Income measured after housing costs also deducts housing costs paid for by housing benefit. Before housing costs, this benefit may appear to represent an increase in income, but in fact goes straight to the payment of housing costs.

In a household headed by a single person, income will go further than in a household containing adults and children. For this reason, household incomes are adjusted (or ‘equivalised’) during the statistical calculation to take into account the number of adults and children who live there. The income amounts used in this data correspond to a couple with no children. See Income Dynamics Background information and methodology (PDF opens in a new window or tab) for more detail.

The data comes from the Department for Work and Pensions’ analysis of the Understanding Society survey ran by the University of Essex.

The ethnic categories used in this data

For this data, the number of people surveyed (the ‘sample size’) was too small to draw any firm conclusions about detailed ethnic categories.

Therefore, the data is broken down into the following 6 broad groups, where ‘White Other’ refers to White ethnic minorities.

  • White British
  • White Other
  • Black/Black British
  • Asian/Asian British
  • Mixed/Multiple
  • Other

2. People living on persistent low income before housing costs are paid (BHC)

Location:
United Kingdom
Time period:
2011 to 2015
Source:
Understanding Society, Income Dynamics
Percentage of people with income less than 60% of median income before housing costs are paid in 3 out of 4 years
Ethnicity All Children Working-age adults Pensioners
% % % %
Asian 18 25 14 14
Black 16 20 14 9
Mixed 10 11 10 withheld because a small sample size makes it unreliable
White British 9 10 7 12
White other 8 8 6 15
Other 20 27 17 withheld because a small sample size makes it unreliable

Data withheld because a small sample size makes it unreliable

Download table data for ‘People living on persistent low income before housing costs are paid (BHC)’ (CSV) Source data for ‘People living on persistent low income before housing costs are paid (BHC)’ (CSV)

Summary of Low income People living on persistent low income before housing costs are paid (BHC) Summary

This data shows that:

  • children from the Other, Asian and Black ethnic groups were more likely to live in households with a low income than children in White households

  • working age adults from the Other White and White British ethnic groups were least likely to live in households with a low income

  • overall, the Other, Asian and Black ethnic groups were all more likely to live in households with a low income than the White ethnic groups

  • of the groups for which enough data is available, the Other White group had the highest percentage of pensioners on low income (15%)

  • the Other ethnic group had the highest percentage of children (27%) and working age adults (17%) on a low income

  • the data shows that people from a Mixed background were also likely to live in low income households – however, small sample sizes make this finding unreliable

3. People living on persistent low income after housing costs are paid (AHC)

Location:
United Kingdom
Time period:
2011 to 2015
Source:
Understanding Society, Income Dynamics
Percentage of people with income less than 60% of median income after housing costs are paid in 3 out of 4 years
Ethnicity All Children Working-age adults Pensioners
% % % %
Asian 22 31 20 5
Black 25 31 22 withheld because a small sample size makes it unreliable
Mixed 17 22 16 withheld because a small sample size makes it unreliable
White British 11 15 10 8
White other 15 18 14 10
Other 31 withheld because a small sample size makes it unreliable 29 withheld because a small sample size makes it unreliable

Data withheld because a small sample size makes it unreliable

Download table data for ‘People living on persistent low income after housing costs are paid (AHC)’ (CSV) Source data for ‘People living on persistent low income after housing costs are paid (AHC)’ (CSV)

Summary of Low income People living on persistent low income after housing costs are paid (AHC) Summary

This data shows that:

  • overall, after housing costs have been paid, a higher proportion of households are low income than before housing costs have been paid

  • the Other ethnic group have the highest percentage of households in low income, at 31%

  • White British households have the lowest percentage of households in low income, at 11%

  • Children from the Asian and Black ethnic groups were most likely to live in low income households; 31% of each of these groups did so

4. Methodology

These statistics are derived from the Understanding Society survey waves 2-6, 2010/2015.

Understanding Society covers the United Kingdom. Individuals in households recruited at the first round of data collection are visited each year to collect information on changes to their household and individual circumstances. Interviews are typically carried out face-to-face in respondents’ homes by trained interviewers. Household members aged 16 or older are interviewed and the same individuals are re-interviewed in successive years to see how things have changed. Individuals become eligible for a full interview once they reach the age of 16.

Equivalisation adjusts incomes for household size and composition, taking an adult couple with no children as the reference point.

Weights have been applied which take the combined population subsamples, adjusting for unequal selection probabilities, differential non-response, and potential sampling error.

Estimates are subject to sampling error and remaining non-sampling bias.

Surveys gather information from a sample rather than from the whole population. The sample is designed carefully to allow for this, and to be as accurate as possible given practical limitations such as time and cost constraints. Results from sample surveys are always estimates, not precise figures. This means that they are subject to a margin of error which can affect how changes in the numbers should be interpreted, especially in the short-term. Year-on-year movements should be treated with caution.

Suppression rules and disclosure control

Any values based on fewer than 100 responses have been completely suppressed to preserve confidentiality. Percentages are given to the nearest percentage point.

Rounding

Percentages are given to the nearest percentage point.

Quality and methodology information

5. Data sources

Source

Type of data

Survey data

Type of statistic

Experimental statistics

Publisher

Department for Work and Pensions

Publication frequency

Yearly

Purpose of data source

The Income Dynamics statistics are designed to report on income movements and the persistence of low income for various population groups. Reporting on these issues is required under UK law and the Income Dynamics statistics are intended to supplement the Households Below Average Income (HBAI) publication. The analysis of the Income Dynamics data allows the tracking of changes in income over time for different population groups.

6. Download the data

Low income - Spreadsheet (csv) 56 KB

This file contains the following: ethnicity, year, age group, value and denominator

Publication release date: 10 October 2017

full page history
  1. First published

From: Department for Work and Pensions

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