For this measure of low income and child material deprivation, respondents are asked whether they have access to a list of 21 goods and services. Statistical significance is a technical concept that says whether a reported change is likely to have arisen only by chance due to variations in the sampling. Income components are all considered before tax (gross). In practice, this means that small, short-term movements should be treated as indicative and considered alongside medium- and long-term patterns in the series. In this report, comparisons between years are generally made using percentages rounded to the nearest percentage point for each year. A household is said to be in relative low income if their equivalised income is below 60 per cent of median income, while they are said to be in absolute low income if their equivalised income is below 60 per cent of the 2010/11 median income adjusted for Regional equivalised disposable income, after housing costs A child is considered to be in low income and child material deprivation if they live in a family that has a total score of 25 or more out of 100 and a net equivalised disposable household income BHC below 70% of the median. The equivalised disposable income of a single person household is the same as its unequivalised disposable income. ONS estimates of median and mean household income from 1977, up to and including FYE 2016, are based on the Living Costs and Food Survey (LCF). The median household income is the income of what would be the middle person, if all individuals in the UK were sorted from poorest to richest. Our main income measure includes contributions from earnings, state support, pensions, and investment income among others, and is net of tax. Due to the reduced sample size in FYE 2021, confidence intervals around estimates for FYE 2021 are at least 70% wider than in previous years. One drawback of the Gini is that, as a single summary indicator, it cannot distinguish between differently shaped income distributions. growth in household income (BHC) varied across the income distribution: the household incomes of individuals in the bottom quarter of the income distribution recorded positive real terms income growth, those between the 30th and 80th percentiles recorded a reduction in real incomes, there was a more mixed picture for the highest income quintile, there was a 1 percentage point reduction in income inequality (Gini Coefficient) in FYE 2021, both before and after housing costs, with the trend remaining broadly stable since FYE 2011, the percentage of individuals in relative and absolute low income decreased both before and after housing costs in FYE 2021. Recommendations focussed on key areas including accessibility and guidance, understanding poverty, data gaps, data quality, and trustworthiness. This publication uses terms such as income statistics and people living in low income households to describe more precisely what the data reflects. Three of the four low income measures for children included in section 4 of the Welfare Reform and Work Act 2016 form part of the HBAI publication. In FYE 2021, 81% of children in relative low income BHC (with a household income below 70% of the median) lived in a food secure household, and 80% of children in absolute low income BHC. Income from these sources is categorised as earnings in the charts below. You can change your cookie settings at any time. Average weekly household expenditure on goods and services in the UK. In both cases, this represents a continuation of the downward trend in the proportion of individuals in absolute low income. Hide. An important strength of these data is that comparable estimates are available back to 1977, allowing analysis of long-term trends. Effects of taxes and benefits on UK household income FYE 2020 Bulletin | Released 28 May 2021 The redistribution effects on individuals and households of direct and indirect taxation and benefits received in cash or kind, analysed by household type and the changing levels of income inequality over time. Median household disposable income in the UK was 31,400 in financial year ending (FYE) 2021, which covered the first year of the coronavirus (COVID-19) pandemic; this was an annual increase. Table 11 and Table 32 of our Household disposable income and inequality, UK: financial year ending 2021 dataset provide estimates of uncertainty for many headline measures of average income and income inequality. An adjustment to correct for this is made to very rich households in FRS-based results using data from HMRCs Survey of Personal Incomes. Table 11 and Table 32 provide estimates of uncertainty for many headline measures of average income and income inequality. The BHC and AHC Gini coefficients both fell slightly between FYE 2020 and FYE 2021, by 1 percentage point each to 34% BHC and 38% AHC. Youve accepted all cookies. In financial year ending (FYE) 2020 (April 2019 to March 2020), the period leading up to the coronavirus (COVID-19) pandemic, median household income in the UK was 30,500, based on estimates. Main points Based on the Office for National Statistics's (ONS's) Living Costs and Food Survey, the UK median disposable household income was 27,300 in the financial year ending (FYE). The reduction represented a decrease in real terms of 1.7% (BHC) and 1.4% (AHC). In FYE 2021, the S80/S20 ratio increased slightly in comparison with FYE 2020. Income inequality for both groups remained at similar levels in FYE 2020. adjusting income in the same way for all people aged 14 and over in a household (beyond the household reference person), regardless of whether the person is a child/working-age adult/pensioner or whether they are disabled or not, the statistics treat all members of each household equally in terms of the overall household income i.e. The GSS income and earnings coherence work plan was published on 14 October 2021. These are: compile base data this involves joining three years of historical LCF data, uprate base data adjust the base data to reflect changes in the macro-economic conditions that have affected households at different points of the income distribution; for instance, taking into account wage growth from more timely earnings growth data, model tax and benefit changes apply rules of the current tax and benefit system to the uprated base data, recalibrate weights account for changes in labour market participation and the socio-demographic characteristics of the population between base data and reference period. In FYE 2021, 85% of individuals in relative and absolute low income BHC (with a household income below 70% of the median) lived in a food secure household. Incomes are adjusted for inflation using the consumer prices index including owner-occupiers' housing costs (CPIH). This removed some, but not all, of the observed bias. The higher the number, the greater the gap between those with high incomes and those with the low incomes. See Tables 1.4a for central estimates and Table 1.4a (CI) for the confidence intervals displayed in these charts. Average household income, UK: financial year ending 2021, Interpreting changes in UK income estimates during the coronavirus pandemic: financial year ending 2021. As such, analysis of the average income of people living in retired households can include much younger people and potentially exclude older people. In addition, growth in pensioner incomes was driven by State Pension uprating using the triple lock. The median household income is the income of what would be the middle person, if all individuals in the UK were sorted from poorest to richest. This year DWP has also published an experimental series of combined working age absolute low income and material deprivation estimates covering FYE 2011 to FYE 2021. We have chosen to emphasise the non-comparability of the estimates for the current year by presenting a discontinuity in the time series chart above. United Kingdom Food Security Report 2021: Theme 4: Food - GOV.UK We have therefore chosen to present our analysis by income decile, rather than by percentile, in order to draw meaningful conclusions. Median household disposable income in the UK was 32,300 in the financial year ending (FYE) 2022, a decrease of 0.6% from FYE 2021, based on estimates from the Office for National Statistics. Larger reductions in real terms BHC incomes were recorded for the top 10% of the income distribution, ranging between 2 and 5%. Banded equivalised disposable income and non-equivalised gross income, UK, financial year ending 2020 Release date: 10 January 2022. Equivalised income is calculated by dividing the total household income by the total of the weightings. Both income sources are taken into account in the FYE 2021 estimates, although for SEISS this is a consequence of estimating income using previous years profit data, rather than directly using reported amounts of SEISS grants received. Figure 4 highlights the accuracy of the provisional estimates of income inequality over the five years during which subsequent outturn data is available. The Gini coefficient of equivalised disposable income before social transfers (pensions excluded from social transfers) measures the extent to which the distribution of equivalised disposable income before social transfers with pensions excluded from social transfers (EQ_INC22), deviates from a perfectly equal distribution. 1. These statistics are assessed fully compliant with theCode of Practice for Statisticsand are therefore designated asNational Statistics. Those falling below this line are considered to have relative low income. All estimated levels are stable compared with FYE 2020. For instance, this bulletin highlights that the ratio of the income of the person at the bottom of the top 10% to that of the person at the top of the bottom 10% the P90/P10 ratio increased from 3.9 to 4.5 between FYE 2017 and FYE 2020. This is a consequence of the decision not to publish additional breakdowns of the headline measures in this statistical release, in response to the coronavirus (COVID-19) pandemic data quality issues. In accordance with the Code of Practice for Statistics, all DWP National Statistics are also announced on the Government Statistics website, and in the DWP statistics release calendar. While no explicit adjustment for the under-coverage of the richest earners is applied in the nowcasting model, the growth rates are applied to published FYE 2019 estimates that have been adjusted. In 2021, the 20 % of the population with the highest income received 38.2 % of disposable income in the EU Member States. The Gini coefficient of gross income (which includes cash benefits) increased over the same period (FYE 2011 to FYE 2020), up by 1.0 percentage points. Working-age Adults in Low Income Households and Low Income by Work Status, People in Low Income Households, by disability in the family, Long-term Trends (data prior to FYE 1995 are not National Statistics), Find out about the Energy Bills Support Scheme, Households below average income: for financial years ending 1995 to 2021, nationalarchives.gov.uk/doc/open-government-licence/version/3, combined working age absolute low income and material deprivation estimates, publications have been made significantly shorter, improved methodology for measuring and reporting uncertainty, schedule of statistical releases over the next 12 months, Recommendation 4: Producers should look to provide clearer and more detailed signposting to other income-based poverty statistics in their bulletins (recommendation 4), Recommendation 11: Increase the consistency in the way [, across all deciles, earnings is the main source of gross income for households containing only working-age adults. More details are available in the FRS background information and methodology note. For more information on the specific changes to this years publication, please see the New for this publication section below. As shown section 5 above, this also group receive a greater proportion of their income from employment and so their results are more sensitive to changes in the labour market. Income BHC at the 10th percentile is around half of the median (50th percentile) implying that around 10% of the population have less than half of the median household income BHC. Median income provides a good indication of the standard of living of the "typical" individual in terms of income. There were also increases in the proportions who lived in a household with high food security, with both measures improving to 74% from 69% and 68% respectively. This was driven by a reduction in mean disposable income in both the fifth poorest and richest households of 3.4% and 1.3% respectively. If they dont have a given item (because of cost, health, or availability), this is scored in the material deprivation measure, with items more commonly owned in the population given a higher weighted score. Further information is available in the technical report detailing the impact of the coronavirus (COVID-19) pandemic on the HBAI Statistics. See Tables 1.4c and 1.4d for full data. Median income between the financial year ending (FYE) 2019 (April 2018 to March 2019) and FYE 2020 (April 2019 to March 2020) remained broadly unchanged at 29,900. We will also use these survey-based figures to evaluate the accuracy of these nowcasts. Household income inequality, UK - Office for National Statistics See Chapter 12 for more information on equivalisation in HBAI. Although, at the time of producing these statistics, detailed survey data on household incomes are not yet available for FYE 2020, a lot is known about its individual components and the factors that affect them. National Statistics status means that official statistics meet the highest standards of trustworthiness, quality and public value and comply with all aspects of the Code. Comparisons across different types of individuals and households (such as retired and non-retired, or rich and poor) or over time is done after income has been equivalised. A household income measure implicitly assumes that all members of the household benefit equally from the households income and so appear at the same position in the income distribution. While the fifth richest households saw a nominal reduction of 957 in household disposable income, the poorest fifth of households saw a corresponding reduction of 568. In 2021, median equivalised annual disposable income was PPS 18 019 per inhabitant in the EU, ranging from PPS 8 703 in Romania, to PPS 32 132 in Luxembourg. For that reason, it is useful to look at this index alongside other measures of inequality. The primary measure used in HBAI is equivalised disposable household income adjusted for household composition (called equivalisation), estimated on both a before and after housing costs basis (BHC and AHC). This is an increase of 3 and 4 percentage points for those in relative low income BHC and absolute low income BHC respectively. In particular, administrative data are likely to help address limitations in survey-based statistics, discussed in more detail in the strengths and limitations section such as under-reporting at the top and bottom of the income distribution, and enable analysis at lower geographic levels. Effects of taxes and benefits on UK household income: financial year ending 2019 Bulletin | Released 23 June 2020 The redistribution effects on individuals and households of direct and indirect taxation and benefits received in cash or kind, analysed by household type and the changing levels of income inequality over time. Please note that these changes do not match the differences between the levels displayed in the chart due to rounding. The proportion who live in a household with high food security is 94% for both measures.