Persistent low income

Published

1. Main facts and figures

  • a household is in persistent low income if it has less than 60% of the UK’s median (average) income for 3 out of 4 years - this was £28,000 for a couple with no children in 2016-2017
  • out of all ethnic groups, people living in Asian or Other ethnic group households were most likely to be in persistent low income
  • people living in White households were least likely to be in persistent low income
Things you need to know

This data is based on a survey of a sample of the population from which generalisations have been made about the wider population. As such, there is a degree of uncertainty in the findings.

This uncertainty is greater when there are fewer respondents in a group. For example, fewer pensioners living in households in the Mixed ethnic group were surveyed, so the findings are less reliable. Be careful when comparing groups with small numbers of respondents. Where the number of respondents is very small, data is withheld. This is shown in the charts and tables.

Confidence intervals for the estimates presented are not available, so any changes seen in the data can’t be shown to be meaningful (statistically significant). View methodology for more information. Data for people living in households with unknown ethnicity isn’t shown separately. However, people living in households with unknown ethnicity are included in the estimates for ‘All’.

Download the data for:

  • figures for the periods 2010 to 2014, 2011 to 2015, 2012 to 2016 and 2013 to 2017
  • persistent low income estimates based on both 60% and 70% of median income
  • persistent low income estimates on both a before and after housing costs basis
What the data measures

This data shows the percentage of individuals living in households which have ‘persistent low income’. It also shows the percentage of individuals entering and exiting low income.

Households are classed as being low income if they live on less than 60% of the UK’s median income. Persistent low income means the household has had low income for at least 3 out of 4 years.

The data measures persistent low income both before and after housing costs have been paid. Figures for income before housing costs do not include costs like mortgages but do include state benefits, such as housing benefit.

In 2016 to 2017 the median income before housing costs were paid was around £28,000 and the median income after housing costs were paid was around £25,000.

In this data, a household enters low income if they were classified as ‘low income’ in 2016-2017 but not in the previous year. A household leaves low income if they were classified as ‘low income’ in 2016-2017 but not in the previous year.

The number of people entering and leaving low income in any year tends to be roughly similar, even though the percentages look very different. This is because those entering low income are calculated as the percentage of all households that were not in low income , whereas people leaving low income are calculated as the percentage of those already in low income (a much smaller number).

A household is one person or a group of people (not necessarily related) who have the accommodation as their only or main residence. If it is a group, they must share cooking facilities and also share a living room, sitting room or dining area.

The ethnic background of the household is based on the ethnicity of the ‘household reference person’, who is usually the person with the highest income. There may be some people living in the house from different ethnic backgrounds.

A child is an individual under 16 years old, or someone who is 16 to 19 years old and:

  • not married, in a civil partnership or living with a partner, and
  • living with their parents or a responsible adult, and
  • in full-time education or unpaid government training

A working age adult is someone who is over 16 but below state pension age.

A pensioner is over the state pension age.

Presenting estimates before and after housing costs shows 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, and they are therefore less likely to be in persistent low income after housing costs have been deducted. Over 70 per cent of pensioners in the Understanding Society survey in 2013 to 2017 had paid off their mortgages.

The ethnic categories used in this data

For this data, the number of people from some specific ethnic categories surveyed (the ‘sample size’) was too small to draw any firm conclusions. Therefore, the data is broken down into the following 5 broad groups:

  • Asian
  • Black
  • Mixed
  • White
  • Other

In addition, the White ethnic group is broken down into 2 separate groups:

  • White British
  • White Other

2. By ethnicity

Percentage of individuals in households with persistent low income, by ethnicity
Ethnicity % Number of respondents
All 9 32,976
Asian 18 2,755
Black 14 1,075
Mixed 10 366
White 8 27,289
White British 8 25,797
White other 7 1,492
Other 18 190

Download table data for ‘By ethnicity’ (CSV) Source data for ‘By ethnicity’ (CSV)

Summary of Persistent low income By ethnicity Summary

A household is in persistent low income if it has less than 60% of the median (average) UK income for 3 out of 4 years. In 2016-17, this was £28,000 for a couple with no children.

This data shows that:

  • 18% of people living in Asian and Other ethnic group households had a persistent low income, the highest percentages out of all ethnic groups
  • 8% of people living in White households had a persistent low income, the lowest percentage out of all ethnic groups

3. By ethnicity and age group

Percentage of individuals in households with persistent low income, by ethnicity and age group
All Children Working age adults Pensioners
Ethnicity All % All Number of respondents Children % Children Number of respondents Working age adults % Working age adults Number of respondents Pensioners % Pensioners Number of respondents
All 9 32,976 11 7,848 7 18,016 11 7,112
Asian 18 2,755 27 1,012 14 1,569 14 174
Black 14 1,075 16 370 12 599 16 106
Mixed 10 366 9 119 10 219 withheld because a small sample size makes it unreliable 28
White 8 27,289 10 5,966 7 14,734 11 6,589
White British 8 25,797 10 5,579 7 13,905 11 6,313
White other 7 1,492 7 387 5 829 10 276
Other 18 190 withheld because a small sample size makes it unreliable 66 14 105 withheld because a small sample size makes it unreliable 19

Download table data for ‘By ethnicity and age group’ (CSV) Source data for ‘By ethnicity and age group’ (CSV)

Summary of Persistent low income By ethnicity and age group Summary

A household is in persistent low income if it has less than 60% of the median (average) UK income for 3 out of 4 years. In 2016-17, this was £28,000 for a couple with no children.

This data shows that:

  • children in Asian (27%) and Black (16%) households were more likely to live in persistent low income than those in White households (10%)
  • working age adults in White Other (5%) and White British (7%) households were least likely to live in persistent low income than all other ethnic groups
  • pensioners in Black (16%) and Asian (14%) households were most likely to live in persistent low income than all other ethnic groups

4. By ethnicity and age group (after housing costs)

Percentage of individuals living in households in persistent low income after housing costs are paid, by ethnicity and age group
All Children Working age adults Pensioners
Ethnicity All % All Number of respondents Children % Children Number of respondents Working age adults % Working age adults Number of respondents Pensioners % Pensioners Number of respondents
All 13 32,976 20 7,848 12 18,016 11 7,112
Asian 26 2,755 35 1,012 21 1,569 17 174
Black 29 1,075 36 370 25 599 31 106
Mixed 26 366 34 119 24 219 withheld because a small sample size makes it unreliable 28
White 12 27,289 18 5,966 11 14,734 11 6,589
White British 12 25,797 18 5,579 11 13,905 11 6,313
White other 14 1,492 16 387 14 829 13 276
Other 28 190 withheld because a small sample size makes it unreliable 66 25 105 withheld because a small sample size makes it unreliable 19

Download table data for ‘By ethnicity and age group (after housing costs)’ (CSV) Source data for ‘By ethnicity and age group (after housing costs)’ (CSV)

Summary of Persistent low income By ethnicity and age group (after housing costs) Summary

A household is in persistent low income after housing costs, if it has less than 60% of the median (average) UK income (after housing costs have been taken off) for 3 out of 4 years. In 2016-17, this was £25,000 for a couple with no children.

This data shows that:

  • 13% of people lived in households with persistent low income after housing costs were paid, compared with 9% before housing costs
  • Black households were most likely to live in persistent low income after housing costs were paid (29%) and White households were the least likely to (12%)
  • among children, those living in Black (36%) and Asian (35%) households were most likely to live in persistent low income after housing costs were paid than all other ethnic groups
  • among working age adults, those in Black (25%) and Other ethnic group (25%) households were most likely to live in persistent low income after housing costs were paid than all other ethnic groups
  • among pensioners, those in Black (31%) households were the most likely to live in persistent low income after housing costs were paid than all other ethnic groups

5. Entering low income

Percentage of individuals entering low income, by ethnicity
Ethnicity % Number of respondents
All 5 96,040
Asian 9 6,852
Black 9 3,033
Mixed 8 1,071
White 5 80,127
White British 5 75,593
White other 5 4,534
Other 9 544

Download table data for ‘Entering low income’ (CSV) Source data for ‘Entering low income’ (CSV)

Summary of Persistent low income Entering low income Summary

A household is in low income if they live on less than 60% of the UK’s median (average) income (£28,000 for a couple with no children in 2016-17). A household enters low income if they were classified as ‘low income’ in 2016-17 but not in 2015-16.

This data shows that:

  • people in Asian (9%), Black (9%) and Other ethnic group (9%) households were most likely to enter into low income

6. Leaving low income

Percentage of individuals leaving low income, by ethnicity
Ethnicity % Number of respondents
All 35 16,569
Asian 29 2,923
Black 37 879
Mixed 37 259
White 35 11,964
White British 35 11,281
White other 36 683
Other 26 169

Download table data for ‘Leaving low income’ (CSV) Source data for ‘Leaving low income’ (CSV)

Summary of Persistent low income Leaving low income Summary

A household is in low income if they live on less than 60% of the UK’s median (average) income. In 2016-17, this was £28,000 for a couple with no children. A household leaves low income if they were classified as ‘low income’ in 2015-16 but not in 2016-17.

This data shows that:

  • of all ethnic groups, Black (37%), Mixed (37%) and White (35%) households were most likely to see a rise in income that meant they were no longer in low income

7. Methodology

These Income Dynamics statistics are from the Understanding Society survey waves 2-8, 2010 to 2017.

Understanding Society is a UK longitudinal survey that collects data on changes in the circumstances of respondents and their households.

Household members over the age of 16 are interviewed once a year over several years to see what’s changed. Understanding Society has a two-year survey period (“wave”). In 2016-2017 (Wave 8) it consisted of a longitudinal sample of over 35,000 individuals in the UK.

Household incomes are adjusted (or ‘equivalised’) during the statistical calculation to take into account the number of adults and children who live there. Equivalisation adjusts incomes for household size and composition, taking an adult couple with no children as the reference point. After equivalisation has been applied, households with the same equivalised income can be said to have a comparable standard of living.

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

Confidence intervals for the estimates presented are not available, so any changes seen in the data can’t be shown to be statistically significant. Confidence intervals allow changes or differences in data to be checked to see if they’re reliable. Differences are statistically significant if the results for the 2 groups or time periods being compared are within entirely different ranges.

Estimates are subject to sampling error and remaining non-sampling bias. Surveys gather information from a sample rather than from the whole population. The selection of the sample for the Understanding Society study is designed to be representative of the whole population, but constraints such as time and cost limit accuracy. Results from sample surveys are estimates and therefore subject to a margin of error. This 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 suppressed to preserve confidentiality.

Rounding

Percentages are given to the nearest whole number.

Related publications

Households below average income (HBAI) statistics Income Dynamics Statistics

Quality and methodology information

8. 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) statistics. The analysis of the Income Dynamics data allows the tracking of changes in income over time for different population groups.

9. Download the data

Persistent low income flatfile - Spreadsheet (csv) 123 KB

Persistent low income rates and sample sizes before and after housing costs by Years, Ethnicity of household reference person and Age Bracket.

Entry and exit percentages - Spreadsheet (csv) 17 KB

Low income entry and exit percentages and sample sizes before and after housing costs by Years and Ethnicity of household reference person.