Guidance

Background information and methodology: Children in low income families: local area statistics

Updated 27 March 2025

1. Context

The children in low income families (CiLIF) statistics, provide information on the number and proportion of children living in Relative and Absolute low income Before Housing Costs by local area across the United Kingdom.

Statistics on the number of children (by age) and the proportion of children under 16 in low income families each year are published. Figures are calibrated to the Households Below Average Income (HBAI) survey estimates but provide more granular local area information not available from the HBAI for example, by local authority, parliamentary constituency and ward.

Following the successful completion of discovery work and a period of user engagement, the next release of these Official Statistics (March 2025) will calibrate figures to HBAI single-year UK estimates (instead of HBAI 2 or 3 year regional estimates) and impute receipt of Scottish Child Payment for eligible households so it is included as an income stream. Consequently, there will be revisions to the back-series at UK, regional and local area level.

Alongside this, we have published a paper on proposals for developing After Housing Costs measures of local area child poverty statistics and are seeking users’ views. Comments and feedback from users are welcome by emailing stats.consultation-2018@dwp.gov.uk.

2. Methodology

The methodology underpinning these statistics incorporates a number of fundamental principles:

• Analyses of Universal Credit, Housing Benefit and Tax Credit household data alongside Child Benefit data to establish families’ relationships and composition

• Derivation of families’ gross income Before Housing Costs (BHC) and;

• Equivalisation to account for family size and composition

• Calibration to HBAI 1-year UK estimates by work-status to ensure consistency of UK level statistics in counts of children in low-income

• Calculation of rates for under 16s, using mid-year population estimates for England and Wales, Scotland and Northern Ireland

2a. Identifying family relationships and composition

Statistics are derived from the database “RAPID” (Registration and Population Interaction Database) which provides a single coherent view of citizens’ interactions with DWP and HMRC within a tax year. Relationships are built from analyses of household benefits. That is, information on sole or joint claimants of Universal Credit, Tax Credits and Housing Benefits payments which is used to determine claimant and partner information. When combined with Child Benefit claimant data, this view provides a measure of the family unit.

The methodology accounts for changes in family composition throughout the year (for example re-partnering, multiple partners, becoming a sole parent) by tracking these changes in benefit claims and the associated personal income of claimants and partners.

2b. Gross Income (Before Housing Costs)

The number of children in families (not households), Before Housing Costs (BHC) in both Absolute (2010 to 2011 index) and Relative terms is derived from analyses of family income over the entire tax year.

Income is defined as Gross Personal Income from benefits or tax credits, from employment and self-employment, and from occupational pensions.

This is not the same as HBAI income measures, but for the purposes of looking at the distribution of family income across local areas, it offers a consistent approach that captures the main income streams.

The Self Employment Income Support Scheme (SEISS) data has not been used in the derivation of the income measures for the self-employed for the FYE 2021. This is because the SEISS amount is generated on a different basis to Self Assessment. All Coronavirus Job Retention Scheme (CJRS) payments are paid via the PAYE system as part of weekly or monthly earnings and thus form part of the income measure.

During 2022 to 2024 the government announced and implemented additional support to families with several cost-of-living support schemes, depending on peoples’ circumstances. These family income streams are included in the derivation of the statistics.

Scottish Child Payment

Scottish Child Payment (SCP) began in February 2021 for households with children under the age of six. A temporary bridging payment for households with school age children in receipt of free school meals, remained in place until the second phase was implemented in November 2022. This phase extended eligibility to under 16 year-olds from 14 November 2022. SCP is paid every four weeks to help towards the costs of looking after each child under 16 for families who get certain benefits.

In consultation with Scottish Government analysts, and in the absence of a data feed for SCP, the CiLIF methodology has been adapted for the March 2025 publication to now include imputed receipt of SCP for eligible families as an income stream.

Families eligible for SCP are those already in receipt of other income-related benefits. The methodology appends SCP income to families’ gross annual income totals and accounts for the number and age of children in the family and the proportion of the year the family claims income-related benefits.

Payment amounts are modelled as:

• 2021/22 under 6 year olds: £10 per week per child

• 2022/23 under 6 year olds paid at £20 per week to November 2022. From December 2022 payments were extended to those under 16 year olds and the payment increased to £25 per week

• 2023/24 all under 16 year olds, paid at £25 per week

The imputation methodology assumes that every family eligible for SCP claims it i.e. that the take-up rate is 100%. This contrasts with the published SCP take-up rates: SCP take up rates which show that for children aged under 6 in 2023/24 is 97% and for children aged 6 to under 16 in 2023/24 is 85%.

2c. Equivalisation

In order to allow comparisons of the living standards of different types of households, income is adjusted to account for variations in the size and composition of the households in a process known as equivalisation. This assumes that all individuals in the household benefit equally from the combined income of the household. Thus, all members of any one household will appear at the same point in the income distribution.

Equivalence scales conventionally take an adult couple without children as the reference point, with an equivalence value of one. The process then increases relatively the income of single person households (since their incomes are divided by a value of less than one) and reduces relatively the incomes of households with three or more persons, which have an equivalence value of greater than one.

2d. Calibration

For previous publications of CiLIF statistics up to and including March 2024, statistics were calibrated to the 3 year (2 years for periods including 2020-21) regional HBAI totals (by work status) to ensure consistency across published statistics. Following a period of discovery and user engagement, from the March 2025 publication (and for the back-series), CiLIF statistics are now calibrated only to the 1 year UK HBAI totals (by work status).

This change has been made to ensure that the granular family-level administrative data is fully exploited to determine where children in the lowest income families live across the UK. The CiLIF statistics provides a proxy estimate of local child poverty using administrative data sources and will not produce the same regional level estimates as HBAI survey estimates.

2e. Population Rates

Rates have been derived by dividing the number of children aged 0 to 15 in low income families by the number of all children aged 0 to 15 (sourced from latest available mid-year population estimates).

For England and Wales, mid-2023 population estimates for country and local authority have been used to derive child poverty rates for FYE 2024. For Westminster parliamentary constituency and wards, mid-2022 population estimates are used as a proxy for FYE 2024 child poverty rates.

For Scotland, mid-2023 population estimates for country and local authority have been used to derive child poverty rates for FYE 2024. For Westminster parliamentary constituency and wards, mid-2022 population estimates are used as a proxy for FYE 2024 child poverty rates. However, population estimates for latest Westminster parliamentary constituency are not available prior to 2022, and thus no back-series of child poverty rates is available prior to FYE 2023.

For Northern Ireland, mid-2022 population estimates for country and local authority have been used to derive child poverty rates for FYE 2024. Population estimates at Westminster parliamentary constituency and wards are not available for latest geographical boundaries, and hence child poverty rates have not been derived in the published tables.

At UK level, mid-2023 country level populations for England, Wales and Scotland are used in combination with mid-2022 population estimates for Northern Ireland to form a proxy for mid-2023 population estimates.

Percentages are shown for children aged under 16 due to the complexity in identifying 16 to 19 year olds defined as child dependents in the population estimates. Revisions to population estimates may be published later in the year. Please note that published rates are, therefore, subject to subsequent revision.

3. Data Sources

These statistics draw data from the Registration and Population Interaction Database (RAPID) which provides a single coherent view of citizens’ interactions with DWP and HMRC within a tax year for the UK. RAPID provides a basis for analyses of children, the family unit, and gross personal incomes (benefits/tax credits, employment, self-employment, occupational pensions) from which estimates of the number of children in low income families can be derived calibrated to HBAI regional estimates on Absolute and Relative definitions.

RAPID is based on 100% extracts of various DWP benefit systems and is supplemented with 100% data extracts from HMRC systems. RAPID collates information on individual activities (and the income generated from those activities) within each tax year, including benefit, employment and in-work benefit interactions, for example Tax Credits and Housing Benefit. Children have been identified from HMRC Child Benefit scans.

4. Definitions

Term	Definition
Children	Dependent individuals aged under 16; or aged 16 to 19 in full-time non-advanced education.
Family	A single adult; or a married or cohabitating couple; or a Civil Partnership; where one adult is claiming Child Benefit and other DWP and HMRC household benefits and tax credits, and any dependent children.
Lone Parent	A single adult who is claiming Child Benefit and other DWP/HMRC household benefits/tax credits, and dependent children.
Low income	Gross income measure is Before Housing Costs (BHC) and includes contributions from earning, state support and pensions. Equivalisation adjusts incomes for household size and composition, taking an adult couple with no children as the reference point. For example, the process of equivalisation would adjust the income of a single person upwards, so their income can be compared directly to the standard of living for a Couple
In-work	A family who, combined, have been in employment or self-employment for over 26 weeks of the year.
Out-of-work	A family who, combined, have been in employment or self-employment for under 26 weeks of the year
Age of child	Child age is derived as the duration from Date of Birth (DoB) to 31 March in each year. For 2023 to 2024, analyses of family relationships and income during that year are linked to child ages as at 31 March 2024.

Those in absolute low income have their net equivalised income below 60% of the FYE 2011 median income adjusted for inflation. Those in relative low income have their net equivalised disposable household income below a threshold set at 60% of median income. Comparisons in the Statistical Bulletin focus primarily on relative low income as this is the preferred measure amongst the majority of users. However, the full range of statistics for Relative and Absolute low income are available in the accompanying tables and Stat-Xplore.

Time Series

Statistics on the number of children in low income families for FYE 2015 to FYE 2024 are published. Limitations in the coverage of RAPID mean that earlier statistics using this methodology are not available. In addition, figures for the latest year are provisional as some self-employment data from the previous year is used as a proxy to fill in gaps in timely recording.

Building Local Areas

Consistent with DWP’s approach to building local area statistics, Census Output Area (COA11) is used as the building block to derive standard geographies including:

• Lower Layer Super Output Area (LSOA) GB only
• Middle Layer Super Output Area (MSOA) GB only
• Ward
• (Higher Tier) Local Authority
• Westminster Parliamentary Constituency

5. Revisions

Given the methodological changes to calibration and the inclusion of SCP, these statistics reflect revisions to previously published statistics across the entire back-series.

6. Use of the Statistics

6a General

Uses:

• to meet the demand from users for local estimates of the Before Housing Costs (BHC) number and proportion of children living in low income families to enable strategic decision making and allocation of services at local levels
• to compare and contrast changes in the number and proportion of children in low-income families across local areas within the same country
• to do so in a way that accounts for the rollout of Universal Credit to produce consistent statistics from 2014

Strengths:

• provide local area insights for low level geographies
• whilst the HBAI estimates are built from a survey of households, these administrative statistics covering the family unit, are derived from granular analyses of multiple administrative sources of benefit, tax credit, and earnings data

Limitations:

• the statistics are a measure of children and cannot be used to obtain the number of low-income families
• a family must have claimed Child Benefit and at least one other household benefit (Universal Credit, tax credits or Housing Benefit) at any point in the year to be classed as low income in these statistics
• income is Before Housing Costs (BHC) and is equivalised to adjust for family size and composition. Income is defined as Gross Personal Income from benefits/tax credits, from employment and self-employment, and from occupational pensions. This is not the same as HBAI income measures, but for the purposes of looking at the distribution of family income across local areas, it offers a consistent approach that captures the main income streams
• relationships are built from analyses of household benefits in payment. That is, information on sole or joint claimants of Universal Credit, Tax Credits and Housing Benefits which is used to determine claimant and partner information. When combined with Child Benefit claimant data, this view provides a measure of the family unit
• the statistics are not directly comparable with the predecessor of these statistics produced by HMRC

6b. When to use CiLIF or HBAI regional statistics

• Both Households below average income (HBAI) statistics and Children in low income families: local area statistics publish regional level statistics for children in relative and absolute low income before housing costs

• Users should use HBAI for UK and regional level statistics to provide consistent insights for low-income households across children, working age and pensioners, for sub-groups, and for comparisons before and after housing costs

• Users should use CiLIF for sub-regional, local and small area comparisons of the number and proportion of children in low income, before housing costs

Key differences in HBAI and CiLIF regional statistics

There are differences in the regional Before Housing Costs statistics across publications. These arise because:

1] CiLIF statistics are sourced from administrative data on families’ income. They provide estimates of where (across the UK) the poorest children live based on families’ income and composition. HBAI statistics are sourced from the Family Resources Survey derived from households survey responses. Both publications Background and Methodology documents provide detailed information on how the statistics are derived.

2] 16-19 year old dependents are excluded in CiLIF published tables on counts and rates of children in low-income as an administrative data source for the total number of dependent children in this age range is not available. Counts for 16-19 year old dependents identified in CiLIF are available in the CiLiF Stat-Xplore dataset. The Family Resources Survey identifies all dependent 16-19 year olds in the household, and these are included in the HBAI statistics.

The following table explains some scenarios for when to use HBAI or CiLIF regional estimates:

If interested in:	Use:
all households, children, working age and/or pensioner low-income statistics. Low-income statistics for any of the above three groups on their own or for a comparison across the groups, UK or regional level	Households Below Average Income (HBAI) publication: 3-year averages for regional figures, Before and After Housing Costs, Relative and Absolute measures, Definition of children includes 16-19 year old dependents
children in low income for a geography lower than region: e.g. local authority, Westminster parliamentary constituency or ward, Before Housing Costs, Counts and Rates 0-15 year olds	Children in low-income families (CiLIF) publication, single in-year figures sourced from administrative data, Before Housing Costs only, Relative and Absolute measures, children under 16s only in Bulletin and Tables; data for 16-19 year old dependents is available on Stat-Xplore
comparison of children in low income for geographies lower than region to the regional total, Before Housing Costs, counts and rates 0-15 year olds	Children in low-income families (CiLIF) publication. CiLIF regional totals differ from HBAI totals as the former is sourced from administrative data on families income and the latter from the Family Resources Survey. Comparisons of a regions’ small area statistics against the regional total should be made via CiLIF to ensure that component parts sum to regional totals

6c. History

Impact of the coronavirus (COVID-19) pandemic on statistics

The statistics are calibrated to the UK Households Below Average Income (HBAI) statistics. A full assessment of the impact of the coronavirus pandemic on these statistics is available in the technical reports. which should be considered alongside interpretation of these statistics.

While the data for FYE 2021,FYE 2022, FYE 2023 has undergone extensive quality assurance prior to publication, we recommend that users exercise additional caution when using the data, particularly when making comparisons with previous years and for local areas across countries.

These statistics replace earlier Official Statistics previously published by Department for Work and Pensions (DWP) Children in out-of-work benefit households and HM Revenue & Customs (HMRC) Children in low-income families local measure. In December 2018, DWP and HMRC published their respective releases with a commitment to combine releases going forward.

The new combined set of statistics provide a more coherent picture of children in low income families at a local level across the United Kingdom.

7. Status

These statistics are badged as Official Statistics.

8. Feedback

Email stats.consultation-2018@dwp.gov.uk with feedback and queries about the statistics.

9. Related Statistics

Estimates of numbers in low income in a single year from Households Below Average Income are available.

Other related DWP statistics include:

• DWP Family Resources Survey

• DWP Income Dynamics

The following ONS publications provide useful information and guidance on alternative sources of data on earnings and income:

• income and earnings coherence work plan
• GSS income and earnings statistics interactive database

Indices of multiple deprivation by country are available:

• English Indices of Deprivation

• Welsh Index of Multiple Deprivation

• Scottish Index of Multiple Deprivation

Details of other National and Official Statistics produced by the Department for Work and Pensions can be found on the DWP statistics homepage with a schedule of statistical releases over the next 12 months and a list of the most recent releases. In accordance with the Code of Practice for Statistics, all DWP National Statistics are announced in the government statistics calendar.