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Households Below Average Income

Households Below Average Income. Looking forward to the 2006/07 HBAI publication: New analyses and improvements Peter Matejic (DWP). ESDS Government FRS User Meeting, 25 April 2008. Summary of presentation content. What is covered by HBAI Contents of the 2006/07 publication

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Households Below Average Income

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  1. Households Below Average Income Looking forward to the 2006/07 HBAI publication: New analyses and improvements Peter Matejic (DWP) ESDS Government FRS User Meeting, 25 April 2008

  2. Summary of presentation content • What is covered by HBAI • Contents of the 2006/07 publication • Examples of analysis from 2005/06 data • Relative and absolute low income • Changes to the publication for 2006/07 • Low-income and material deprivation measure • Disability definition • Restructuring and harmonising the publication

  3. HBAI coverage • Private households in United Kingdom • Main source - DWP Family Resources Survey • Measurement of living standards as determined by the net disposable household income • Incomes equivalised and analysed Before and After Housing Costs (BHC and AHC) • Data available at UK Data Archive

  4. Contents of the 2006/07 publication • Similar to previous years • Detailed analysis of household incomes of all individuals, children, working age adults and pensioners for 2006/07 • By quintile, composition of low-income groups and risk of being in a low-income group • Time series of populations, composition of low-income groups and risk of being in a low-income group • Summary statistics about the overall income distribution and persistent poverty

  5. The income distribution in 2005/06 (BHC)

  6. Average real income growth, 1998/99-2005/06

  7. ‘Relative’ low-income indicator • Relative incomes are assessed against the median of the year in question • The indicator falls if the income of poorer households rises faster than population as a whole

  8. ‘Absolute’ low-income indicator • Absolute incomes are assessed against the median in 1998/99 • The indicator falls if poorer households are seeing their income rise in real terms

  9. Change in 60 per cent relative median indicator • Between 1998/99 and 2005/06: • Whole population - 0.8m fall BHC (1.2m AHC) • Children - 0.6m fall BHC (0.6m AHC) • Working age adults - 0.4m rise BHC (0.5m AHC) • Pensioners - 0.5m fall BHC (1.1m AHC)

  10. More likely to be in low income households • Workless working age families • Lone parents • Non-white ethnic groups • Households containing someone with a disability not in receipt of disability benefits • Local Authority / Housing Association tenants • Groups with no savings or with bills in arrears • Working age adults with no qualifications • Pensioners without private pensions

  11. Percentage of individuals in low-income by region/country: average over 2003/04-2005/06

  12. Percentage of individuals in low-income by region/country: average over 2003/04-2005/06

  13. Key changes for the 2006/07 publication • Material deprivation and low income • Disability definition • Restructuring for greater clarity • Greater harmonisation with other FRS-based publications

  14. Measures of child poverty • Three measures of child poverty outlined in SR2007 • number of children in relative low-income households • number of children in absolute low-income households • number of children in relative low-income households and in material deprivation

  15. Low-income and material deprivation concept • Measure is combination of: • Low-income threshold of 70 per cent below median income Before Housing Costs • material deprivation measure • Introduced in 2004/05 • Aims to capture wider measure of families’ living standards

  16. Low-income and material deprivation measure • Material deprivation element based on affordability of 21 goods and services • Material deprivation defined on basis of items that households say they cannot afford • ‘Prevalence weighting’ used, such that the higher the proportion that owns that item, the more the inability to afford it contributes to the measure. • Overall score of 25 or more needed to be materially deprived • 2.1 million children in low-income and material deprivation in 2005/06, down from 2.2 million in 2004/05

  17. Disability definition • We have extended the definition of disability used in the HBAI publication • More in line with the Disability Discrimination Act • Now includes individuals who: • receive medication or treatment without which their impairment, illness or disability would substantially limit their ability to carry out normal day-to-day activities • have ever had a long-term impairment, illness or disability that substantially limited their ability to carry out normal day-to-day activities • Has the impact of increasing the number of individuals classified as having a disability

  18. Restructuring and harmonising the publication • We will bring the supplementary tables into the main section text • All tables covering the same groups together • Easier to navigate through the publication • Dropped some tables in consultation with users • We have sought to harmonise our definitions and classifications with other FRS-based publications • FRS publication • Income related benefits: Estimates of take-up

  19. ANY QUESTIONS?

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