Relative poverty in Scotland decreased in 2013/14 Communities Analysis Division– September 2015

In Scotland, relative poverty, before housing costs, fell in 2013/14, but did not fall to the same extent after housing costs.

In 2013/14, 730,000 people (14%) were in relative poverty before housing costs, 90,000 fewer than the previous year. Relative poverty before housing costs has returned to the levels of previous years, following an increase in 2012/13.

After housing costs, 940,000 people (18%) were in relative poverty after housing costs, 60,000 fewer than the previous year. Despite the decrease in the latest year, relative poverty after housing costs remains higher than in 2010/11.

Decreases in relative poverty in 2013/14 reflect increases in employment, and a shift from part time to full time employment for those on the lowest incomes.

However, after housing costs, poverty has not fallen to the same extent. This is particularly true for families with children. Housing costs have increased faster than income, combined with changes to housing benefit eligibility, meaning little improvement in living standards for many low income families. Combined low income and child material deprivation has continued to increase.

Absolute poverty in Scotland also decreased in 2013/14 Absolute poverty, before housing costs, in Scotland fell in 2013/14, but did not fall to the same extent after housing costs.

In 2013/14, 800000 people (15%) were in absolute poverty before housing costs, 80,000 fewer than the previous year.

However, after housing costs, more than one million people lived in absolute poverty. In 2013/14, 1,030,000 people (20%) were in absolute poverty after housing costs, 70,000 fewer than the previous year. Despite the decrease in the latest year, absolute poverty remains higher than in 2011/12.

Relative child poverty, before housing costs, in Scotland fell in 2013/14, but more than one in five children remain in poverty after housing costs.

In 2013/14, 140,000 children (14%) were in relative poverty before housing costs. This was a fall from 19% the previous year, 40,000 fewer than in 2012/13. However, after housing costs, 210,000 children (22%) were living in relative poverty, unchanged from the previous year.

Despite decreases in child poverty before housing costs, poverty after housing costs remains high and there is a trend emerging of increasing material deprivation for families with children on low incomes.

In 2013/14 increases in employment and hours worked have increased household income. Lone parent employment rates have increased in Scotland, and lone parents saw the largest decrease in relative poverty before housing costs. However, after housing costs, child poverty was unchanged. Changes to housing benefit, and increases in rents meant that there has not been any improvement in living standards.

Absolute child poverty, before housing costs, in Scotland fell in 2013/14, but after housing costs, did not fall to the same extent.

In 2013/14, 150,000 children (16%) were in absolute poverty before housing costs. This was a fall from 20%, 50,000 fewer than in 2012/13. However, after housing costs, 240,000 children (24%) were living in relative poverty, down from 25% in 2012/13.

Relative working age adult poverty, after housing costs, fell in 2013/14, but poverty rates for pensioners increased.

Relative working age poverty before and after housing costs fell in 2013/14.

In 2013/14, 440 working age adults (14%) were in relative poverty before housing costs, down from 15% the previous year (40,000 fewer than in 2012/13). However, after housing costs, 440,000 working age adults (19%) were living in relative poverty, down from 21% the previous year.

The percentage of pensioners in relative poverty increased after housing costs.

160,000 pensioners in Scotland were living in poverty before housing costs in 2013/14, 10,000 more than the previous year. After housing costs, 120,000 (12%) pensioners were in relative poverty, an increase from 11% the previous year.

Working age adult poverty before housing costs fell in 2013/14 reflecting increases in employment and hours worked. While working age adult poverty fell after housing costs, these decreases were smaller. Pensioners are less able to increase their incomes. Lower income pensioners are more reliant on basic state pensions, and while these were uprated in line with average earnings, the increase was below inflation growth.

Absolute poverty for working age adults decreased in 2013/14, before and after housing costs, but increased for pensioners.

15% of working age adults were in absolute poverty before housing costs (down from 16%). After housing costs, 20% of working age adults were in absolute poverty (down from 22%).

Absolute pensioner poverty increased in 2013/13 to 17% (from 16%), while after housing costs it increased to 14% (from 13%).

Child material deprivation is increasing

While relative child poverty fell, the number of children in low income families living in material deprivation continued to increase.

In 2013/14, 130,000 children (13%) were in low income and material deprivation before housing costs, 20,000 more than the previous year. After housing costs, 140,000 children (14%) were living in low income and material deprivation, up from 12% the previous year.

Employment alone is no longer a protection against poverty.

Half of working age adults and children in poverty lived in working households in 2013/14.

In 2013/14:• 48% of working age adults in poverty lived in working households. • 56% of children in poverty lived working households• 40% of all people in poverty lived in working households.

30 per cent of all people in poverty lived in households where at lease one person was in full time employment.

Median household increased for working age adults but continued to decrease for families with children.

Median income in Scotland in 2013/14 was £24,000. This is equivalent to £460 per week. Households in poverty had income less than £14,200 (or £272 per week). Median household income, before housing costs, increased in 2013/14 following three years of decreases.

After housing costs, median household income in 2013/14 was £21,400 (or £411 per week). Households in poverty after housing costs had a household income of less than ££12,100 (or £232 per week).

Median income for working age adults increased in 2013/14 to £501 per week. Median household income for working age adults increased by 3% before housing costs and 5% after housing costs.

This increase in real income in 2013/14 follows three years of decreases. Real income for working age adults has returned to 2010/11 levels (but remains below the peak of £534 in 2009/10).

Median income for families with children continued to fall in 2013/14 to £403 per week. Median household income for families with children fell by 1% before housing costs and 0.6% after housing costs.

This is the fourth annual decrease in median household income for families with children. Real income for families with children is at 2002/03 levels, below the peak of £452 in 2009/10.

Median income for pensioners decreased in 2013/14 to £402 per week. Median household income for pensioners fell by 3% before housing costs and 2% after housing costs.

This decrease in real income in 2013/14 follows an increase in 2012/13. Real income for pensioners has returned to 2007/08 levels (but remains below the peak of £425 in 2009/10).

Poverty rates for women are higher than for men

While poverty rates for single working age men decreased in 2013/14, those for women increased.

The poverty rate for single working age men decreased in 2013/14 to 20% (from 23%), while that for women increased to 21% (from 20%).

After housing costs, the poverty rates for single adult women have been increasing over the last three years, and are higher than that for males in 2013/14. Following a sharp increase in 2012/13, poverty after housing costs for single working age men was 26% in 2013/14, compared with 29% for women.

Poverty rates BHC for female lone parents have been decreasing over the last decade with a large decrease in 2013/14. This reflects the increasing employment rates for lone parents in Scotland.

After housing costs, 31% of female lone parent families lived in poverty. While this was a decrease on the previous year, poverty after housing costs for female lone parents has remained around these levels since 2010/11.

Poverty rates BHC for female pensioners have been higher than that for male pensioners for each of the last ten years. However the gap has widened in the last two years and is now the widest it has been in the last decade.After housing costs, the poverty rate for female pensioners is nearly double that of male pensioners.

The poverty gap between households with an adult with a disability and those without has not narrowed

Poverty rates for households containing a disabled adult fell before housing costs, but did not decrease after housing costs.

In 2013/14, 19% of people in families containing an adult with disabilities were in poverty before housing costs, compared with 12% for those without a disabled adult in the household. There has been no reduction in the poverty gap in recent years.

After housing costs, 23% of people in families with a disabled adult were in poverty – no change from the previous year. This compares with 16% of people in families without a disabled adult, a decrease from 18% the previous year.

Poverty rates for the minority ethnic groups measured are significantly higher than those for the white British population, before and after housing costs.

In 2013/14, 25% of people from minority ethnic groups were in poverty before housing costs, compared with 14% of white British people.

After housing costs, 36% of people from ethnic minority groups were in poverty, compared with 17% of white British people.

After housing costs, those from minority ethnic groups have poverty rates double that of white British people