Households Below Average Income: an analysis of the UK income distribution: FYE 1995 to FYE 2024

Question 1

1.  Main stories

Accepted Answer

The statistics presented in this release show that:

there was a decrease in real terms median household income between FYE 2023 and FYE 2024. The decrease was 2% both before housing costs (BHC) and after housing costs (AHC)
across the income distribution there was a fall in real household incomes (BHC), with larger reductions in the top and especially the bottom 10%
the degree of income change was more substantial for those at the extremes of the distribution, which may reflect the added uncertainties around the measurement of these incomes during FYE 2024 given the smaller achieved sample size compared to FYE 2023
income inequality (measured by the Gini Coefficient) remained at the same levels as FYE 2023, both before and after housing costs. The level has been broadly stable since FYE 2011
the percentage of individuals in relative low income BHC and AHC remained unchanged compared to FYE 2023
the proportion of individuals in absolute low income BHC increased, whereas for AHC the proportion stayed the same
the largest increases in low-income measures were seen for children, with absolute measures showing the largest increase. Changes in BHC rates were very slightly higher than AHC
low-income rates for working-age adults were broadly flat compared with FYE 2023, with a small decrease in rates for relative low income AHC
relative low-income rates for pensioners were broadly flat, and both absolute pensioner rates showed increases
in FYE 2024, 28% of children in the UK were in material deprivation. The proportion of children in combined relative low income and child material deprivation was 16% and the absolute measure was 15%
the proportion of working-age adults in material deprivation was 23% in FYE 2024 and the proportion of working-age adults in combined relative low income and material deprivation was 10%
the proportion of pensioners in material deprivation was 11% in FYE 2024
the percentage of children in food insecure households increased, while for other groups this has remained stable. Increases were greater for those in low-income households
the percentage of individuals in households that had accessed a food bank in the 30 days prior to their Family Resources Survey (FRS) interview has increased since FYE 2023. Those in low-income households remain more likely to have used a food bank. The largest increases in household food bank usage were recorded for children
the percentage of individuals in households that had accessed a food bank in the 12 months prior to interview increased compared with FYE 2023. As with the 30-day measure, the largest increase was for children

Median Household Income - Decrease to £650 (BHC) and £562 (AHC) in FYE 2024

Figure 1: Median Weekly Household Income, FYE 2003 to FYE 2024

Between FYE 2023 and FYE 2024, average (median) household net equivalised disposable income slightly decreased in real terms (i.e. taking account of inflation). The decrease was similar for incomes before and after housing costs. Weekly FYE 2024 median household incomes are estimated at £650 (BHC) and £562 (AHC) respectively.

Income Inequality – Gini coefficient remained stable for BHC and AHC

Figure 2: Income Inequality, FYE 2003 to FYE 2024

A standard international indicator used to summarise inequality in individual income is the Gini coefficient. The Gini coefficient ranges between 0% and 100%, where 0% indicates that income is shared equally among all individuals and 100% indicates the extreme situation where one individual has all a country’s income. Therefore, the lower the value of the Gini coefficient, the more equally income is distributed across all individuals.

In FYE 2024, the Gini coefficient remained at FYE 2023 levels for both BHC and AHC income, at 35% (BHC) and 39% (AHC) respectively. Figure 2 shows that the trend in the measure since FYE 2011 is broadly stable.

Low-income measures - relative BHC and AHC remained stable; the absolute BHC measure increased and absolute AHC remained stable.

Figure 3: Percentage of all individuals in relative low income, FYE 2003 to FYE 2024

The percentage of individuals in relative low income has remained stable this year with the BHC measure remaining at 17%, while the low income AHC measure remains stable at 21%.

Figure 4: Percentage of all individuals in absolute low income, FYE 2003 to FYE 2024

Absolute low income BHC increased in FYE 2024 compared to FYE 2023 from 14% to 15% and the AHC measure remained stable at 18%.

None of the recorded changes in the measures were statistically significant.

Question 2

2.  What you need to know

Accepted Answer

The Households Below Average Income (HBAI) statistics are the UK’s primary source of poverty estimates and are the main source on household incomes. Users include central Government, the devolved governments, local authorities, academics, think tanks, journalists, and the voluntary sector. It meets DWP’s statutory obligation to publish a measure of relative and absolute low income, and combined low income and material deprivation for children under section 4 of the Welfare Reform and Work Act 2016.

Income measures

HBAI estimates incorporate widely used international standard measures of low income and inequality. The primary measure used in HBAI is disposable household income adjusted for household composition (a process called equivalisation), estimated on both a before and after housing costs basis (BHC and AHC). Our main income measure includes contributions from earnings, state support, pensions, and investment income among others, and is net of tax. See section 14 of this report for an exhaustive list.

HBAI uses this net equivalised disposable household income as a proxy for living standards.

A household is said to be in relative low income if their net equivalised disposable household income is below a threshold set at 60% of median income that year, while they are in absolute low income if their net equivalised disposable household income is below 60% of the FYE 2011 median income adjusted for inflation. We also publish measures using thresholds at 50% and 70% of the median.

In line with international best practice, the income measures used in HBAI are subject to several statistical adjustments and, as such, are not always directly relatable to income amounts as they might be understood by people on a day-to-day basis. These adjustments, however, allow us to compare measures over time and across households of different sizes and compositions on a consistent basis.

HBAI uses variants of CPI inflation when estimating how incomes are changing in real terms over time. For further information, see the Households below average income series: quality and methodology information report FYE 2024.

Survey data

Estimates are based on the Family Resources Survey (FRS). The data in this report is from interviews conducted between April 2023 and March 2024. The achieved sample size was just under 17,000 households. This was around 8,000 households fewer than in FYE 2023 given the boost to the issued sample in that year, but similar to the achieved sample in FYE 2022. During the coronavirus (COVID-19) pandemic sample sizes were smaller and interviewing was conducted by telephone. Prior to the pandemic the typical FRS sample was around 19,000 UK households and only face-to-face interviewing was used.

The mode of interview for the FRS during FYE 2024 was face-to-face by default, with telephone used as an alternative by 14% of households. This year’s sample composition was more representative than during the pandemic, with the profile of respondents closer to those who responded to the survey prior to FYE 2020. More information on the FRS fieldwork this year can be found in the Family Resources Survey: background information and methodology report.

Use of survey data means results in this report are subject to uncertainty which can affect how changes should be interpreted, especially in the short term. Latest estimates should be considered alongside long-term patterns being particularly mindful of the effect of changes to FRS fieldwork operations during the coronavirus (COVID-19) pandemic.

There is also uncertainty around the reporting of benefit caseloads in the FRS and HBAI compared with administrative data. FRS Methodology table M6a shows the difference between benefit caseloads in the FRS and HBAI compared with administrative data. (See Family Resources Survey: financial year 2023 to 2024 for further detail). Where the size of the undercount varies compared with the previous year, this is likely to affect incomes, particularly regarding income-related benefits (IRBs). However, users should note that the reason for the undercount is also relevant. For example, an undercount due to under-reporting (survey respondent fails to mention an IRB they were receiving) would reduce incomes. On the other hand, an undercount due to an under-representation of IRB claimants in the achieved sample could increase incomes because, in effect, an IRB claimant would be replaced by someone not receiving IRBs.

Although the grossing regime ensures alignment with Census-based estimates for individuals by age, sex, and region, and for household tenure volumes, it does not control for the cross-section of population and housing tenure. Consequently, the number of children in the private rented sector, for example, could fluctuate from one year to the next, despite separate controls for the number of children and private rented households.

Statistical significance is a technical concept that indicates whether a reported change is likely to have arisen only by chance due to variations in the sampling. We calculate 95% confidence intervals around estimates in HBAI which sets a standard that, where any change is reported as statistically significant, there is less than a 1 in 20 chance that the reported difference is due to sampling variation and there is no real underlying change. Changes are marked as not statistically significant [ns] and statistically significant [s] in our accompanying tables or explicitly noted in this commentary.

Below are the 95% confidence intervals for the headline poverty estimates. The figures show that for all individuals, the confidence intervals are close to +/- 2 percentage points. This means that there is conversely, a 1 in 20 chance that the true estimates are outside the range shown.

Confidence intervals for the percentage of individuals in low income (BHC), United Kingdom, FYE 2024

	Relative Low Income	Percentage point change	Absolute Low Income	Percentage point change
Percentage of individuals	17	0	15	1
95% confidence interval	(16 , 19)	(-1 , 2)	(14 , 16)	(-1 , 3)
Percentage of children	23	1	20	2
95% confidence interval	(20 , 27)	(-3 , 5)	(17 , 23)	(-2 , 6)
Percentage of working-age adults	15	0	13	0
95% confidence interval	(14 , 16)	(-2 , 2)	(11 , 14)	(-1 , 2)
Percentage of pensioners	19	0	16	1
95% confidence interval	(16 , 21)	(-3 , 3)	(14 ,18)	(1 , -1)

Confidence intervals for the percentage of individuals in low income (AHC), United Kingdom, FYE 2024

	Relative Low Income	Percentage point change	Absolute Low Income	Percentage point change
Percentage of individuals	21	0	18	0
95% confidence interval	(20 , 23)	(-2 , 2)	(17 , 20)	(-1 , 2)
Percentage of children	31	1	26	1
95% confidence interval	(27 , 34)	(-4 , 5)	(23 , 30)	(-3 , 6)
Percentage of working-age adults	19	-1	17	0
95% confidence interval	(18 , 21)	(-3 , 1)	(15 , 19)	(-2 , 2)
Percentage of pensioners	16	0	13	1
95% confidence interval	(13 , 18)	(-3 , 2)	(11 , 15)	(-1 , 4)

Note that the reported change between two years in the supporting tables and charts may not equal the difference between the rounded numbers for those years. This is because we round at the final point in any calculation.

The FRS uses a clustered sample design to produce robust regional estimates. Therefore, the FRS is not suitable for analysis below regional level.

Additional tables and data

A wide range of ODS supported tables are available alongside this release, breaking down the results presented in this report for different demographic characteristics. This includes breakdowns of the statistics by region, ethnic group, family type, and economic status. All tables can be downloaded via the HBAI homepage (see Directory of Tables link on this webpage to locate tables referenced in the following pages and to generally find the desired tables). Results are available for most series back to FYE 1995.

HBAI data is also available between FYE 1995 and FYE 2024 on the Stat-Xplore online tool. You can use Stat-Xplore to recreate measures in our static tables and create bespoke HBAI analysis.

The source data behind these statistics is available for download and further analysis via the UK Data Service.

New for this publication

Updated material deprivation measures

Material deprivation estimates for FYE 2024 are based on updated measures and therefore not directly comparable to previous estimates. On charts we have shown this as a break in the series with a dotted vertical line. We advise users not to make a direct comparison of changes in material deprivation estimates between FYE 2023 and FYE 2024.

This update to material deprivation measures follows the inclusion of updated questions in the FRS from April 2023 to March 2024 and analysis by the DWP and LSE to review the previous measures. There are 29 updated Material Deprivation questions included FRS based on recommendations from the LSE Review.

A technical report: update to measures using material deprivation for households below average income FYE 2024 has been published alongside this publication and sets out the analysis and decisions underpinning the updated material deprivation measures for FYE 2024. This technical report also presents a comparison of the FYE 2023 and FYE 2024 estimates based on the previous measures; although as explained in the report, this comparison needs to be treated with caution.

Estimates for the coronavirus (COVID-19) pandemic period (FYE 2021 and FYE 2022) continue to be presented as individual data points. We advise users not to make a direct comparison of changes in material deprivation estimates over this period with those published prior to the pandemic.

Treatment of Cost of Living Support Schemes, Warm Home Discount and Scottish Winter Heating Payment

During FYE 2023, the UK Government implemented additional support for families through several cost of living support schemes, depending on people’s circumstances. Some of these support schemes continued into FYE 2024. These payments are included in the HBAI estimates of household income and reflect the support specific to FYE 2024.

Additionally, income received in respect of the Warm Home Discount and the Scottish Winter Heating Payment is also included in the FYE 2024 HBAI estimates of household income.

Most of the schemes were introduced at pace, in a time limit which made it difficult to adapt the FRS questionnaire to capture them. As each support scheme came with clear eligibility guidelines, receipt of the payments was imputed based on respondent characteristics. Further details on the methodology can be found in the Family Resources Survey: background information and methodology document.

Review of the imputation methodology for Scottish Child Payment

The FRS began collecting data on Scottish Child Payment (SCP) in FYE 2021, following introduction of the benefit in February 2021. The FRS caseload as collected via the survey has remained below official caseloads published by Scottish Government (SG). To reduce under-reporting, receipt of SCP was imputed (for eligible benefit units) for FYE 2023 survey year and has been further revised for FYE 2024, in consultation with SG analysts, to provide more accurate estimates of state support income in the FRS dataset. Further details can be found in the Family Resources Survey: background information and methodology document.

Correction to Educational Attainment

In last year’s publication for FYE 2023, an issue with the FRS variable EDUCQUAL was identified. This variable is used to present estimates of low income for working-age adults by their level of educational attainment. Estimates were withdrawn from the FYE 2023 publication, affecting the following tables: 5.3db BHC, 5.3db AHC, 5.6db, and 5.9db. The FYE 2023 breakdown was also removed from Stat-Xplore.

For FYE 2024, data for FRS variable EDUCQUAL has been corrected and validated, and relevant estimates have been re-instated in tables: 5.3db BHC, 5.3db AHC, 5.6db, and 5.9db.

During the investigation of the issues identified with the EDUCQUAL variable it was found that issues were present for several survey years, dating at least back to FYE 2020. Work will continue to provide revised outputs for historical HBAI datasets, and an update will be available in due course.

The Family Resources Survey: background information and methodology document contains more detail on the underlying issue with the FRS variable EDUCQUAL.

Correction to Cost of Living Support Schemes for FYE 2023 data

In the FYE 2023 HBAI release, the element of the low income benefits and tax credits Cost of Living Payment relating to Pension Credit recipients was not included, which impacted on the FRS- based publications and therefore HBAI income estimates for this year. Revised FYE 2023 data is included in the time series and trend tables in the FYE 2024 HBAI release. Stat-Xplore and the underlying dataset has also been updated to reflect the revised FYE 2023 data. The impact of the revision is small, mainly affecting pensioners in low income. Whilst most low-income measures are unchanged, the revision reduces the number of pensioners in low income by up to 50 thousand and the low-income rates for pensioners by between 0.1 and 0.4 percentage points in FYE 2023.

Other points of note

Following our decision to not publish breakdowns of the FYE 2021 HBAI estimates, all rolling averages published for any period including FYE 2021 are based on two data points only. For FYE 2024 we have reverted to using three data points in the rolling average.

Question 3

3.  The Overall Income Distribution

Accepted Answer

Average household incomes decreased in FYE 2024

The distribution of UK household income is skewed with a long right-hand tail of higher incomes.

Figure 5: Income distribution (BHC) for the total population, FYE 2024

See Table 2.1 BHC for full data. AHC data is available in Table 2.1 AHC.

Interpretation

Deciles divide the population, when ranked by equivalised household income, into ten equal sized groups, while quintiles divide the population into five groups. The shape of the overall income distribution evolves slowly over time, with small year-on-year changes.

The presence of large numbers of individuals with high incomes results in a skewed or non-symmetric distribution. As a result, the median income is the standard measure of average income as changes in the mean can be driven by extreme values. The median represents the income of the individual in the middle of the distribution.

There are many individuals with household incomes around the 60% of median income mark. Those falling below this line are considered to have relative low income. As a result of the decile clustering around this income level, small movements in the overall distribution can sometimes lead to sizeable movements in this low-income measure.

Main Findings

There were a variety of factors that had an upward impact on incomes in FYE 2024 compared with the previous year. The main upward factors were:

Most benefits and the State Pension were uprated by 10.1% in April 2023, well above the rate of inflation for FYE 2024 overall
The main National Insurance Contribution rate for employees was lower in FYE 2024 (12% until January 2024, then 10% for the rest of the year) compared with FYE 2023 (13.25% until November 2022, then 12% for the rest of the year)
An increase to the income-related benefit Cost of Living Payment for households on a qualifying low-income benefit (for example, Universal Credit) or tax credits. This consisted of a payment of £900 which was paid in 3 instalments
As for FYE 2023, a Disability Cost of Living Payment for households on a qualifying disability benefit consisting of a lump sum payment of £150
Like last year, a Pensioner Cost of Living Payment for households entitled to a Winter Fuel Payment for FYE 2024. This consisted of an extra £150 or £300 paid with the eligible household’s normal Winter Fuel Payment
As was the case last year, households in receipt of the Guarantee Credit element of Pension Credit or that were on a low income and had high energy costs also received a one-off discount on their energy bill under the Warm Home Discount scheme. The rebate was £150 and was discounted automatically from bills
For the first time in FYE 2024, the Scottish Winter Heating Payment was also imputed on the FRS and therefore included in estimates of HBAI income.

Conversely, several factors had a downward effect on incomes in FYE 2024 compared with the previous year. The main downward factors were:

Some cost of living support was removed, notably the Energy Bills Support Scheme (worth £400 to all households with a domestic electricity connection) and £150 of council tax rebate for households in bands A to D
The income tax personal allowance and higher rate thresholds were frozen, which reduced income increases from earnings and other sources. This is termed ‘fiscal drag’
Policies limiting the growth of benefit income, such as the continuing roll-out of the two-child limit in Universal Credit and the freezing of Local Housing Allowance (LHA) rates in Universal Credit and Housing Benefit.

And lastly, there are factors affecting incomes in HBAI in any given year which may work to affect incomes in either direction. These include:

The size and characteristics of benefit undercounts
Factors not controlled for by the HBAI grossing regime
Sampling variation

See Section 2 (Survey data) for more details.

For FYE 2024, the main considerations regarding whether income increased or decreased for any given group were:

For groups with income mainly from state benefits, whether the above-inflation uprating of most benefits was enough to make up for the overall reduction in cost of living support, typically £550 per year for those who were not receiving IRBs and £300 per year for those who were receiving IRBs
For groups with income mainly from employment/self-employment, whether an increase in real-terms gross earnings translated into an increase in net earnings, and if it did, whether that increase in net earnings was enough to make up for the overall reduction in cost of living support. This was further complicated in FYE 2024 because gross earnings increases were below inflation at the start of the year (so a reduction in real terms) but above inflation by the end of the year (so an increase in real terms)

Figure 5 shows that in FYE 2024, the average (median) household income before housing costs (BHC) was £650 per week (around £34,000 per year). This represented a decrease of 2% in real terms, or £13 per week, compared with FYE 2023. Average income after housing costs (AHC) also decreased to £562 per week (around £29,400 per year). This also represented a real-terms decrease of 2%, or £14 per week.

After the introduction of the survey series in FYE 1995, real incomes BHC increased steadily until FYE 2010 (see Figure 1). Following falls in FYE 2011 and FYE 2012 related to the recession, there were rises until FYE 2017 and real incomes peaked in the year prior to the coronavirus (COVID-19) pandemic (FYE 2020). In FYE 2024, median incomes BHC fell again and were 4% lower in real terms than the FYE 2020 peak, or £24 per week lower.

Overall average incomes after housing costs (AHC) reduced by slightly more than BHC incomes in FYE 2024. This reflects that, for those around the median, average housing costs grew at a faster rate than components of their household income during FYE 2024. The HBAI data shows that, in particular, mortgage interest payments were higher in FYE 2024 compared with the previous year.

See Table 2.1ts Decile for full data.

See Table 2.1tr for full data on FYE 2024 economic indicators.

Figure 6: Change in real terms income BHC by percentile, FYE 2023 to FYE 2024

Interpretation

Looking at changes to incomes by percentile since FYE 2023 allows for an assessment of how each section of the income distribution changed in FYE 2024. The line in Figure 6 shows the percentage change and the shaded area shows the confidence intervals around these estimates.

For most percentiles, the measured changes to real median incomes were not statistically significant.

Main Findings

This year, the incomes for those in all percentiles of the BHC distribution fell, with the largest reductions in the bottom 10% of the income distribution.

The degree of income change was more substantial for those at the extremes of the distribution, some of which may reflect the additional uncertainties around the measurement of these incomes during FYE 2024 given the smaller achieved sample compared with FYE 2023. Most households (those between the 10th and 90th percentiles) saw a fall in their income averaging around 2%.

Incomes for those with children reduced the most. This partly reflects the flat nature of the cost of living and additional support payments, meaning for larger households they are split between more household members. In addition, real-term falls in income from employment and self-employment were higher for households with children than households without. This represents a rebound from FYE 2023 when income from employment and self-employment increased quite markedly for households with children.

The distribution of the change in incomes AHC was similar to BHC, with income falling for almost all percentiles up to the 90th percentile.

Full details are in the publication charts file.

Question 4

4.  Income Inequality

Accepted Answer

Income inequality measured by the 90:10 ratio increased between FYE 2023 and FYE 2024, with the trend remaining broadly flat since FYE 2011.

Figure 2 shows that the BHC and AHC Gini coefficients remained at the same levels in FYE 2024, at 35% BHC and 39% AHC, respectively. Figure 7 indicates that inequality has slightly increased under the 90:10 measure.

Figure 7: The 90:10 ratio measure of inequality, FYE 2003 to FYE 2024

Interpretation

Percentiles divide the population, when ranked by household income, into 100 equal sized groups. The 90:10 ratio is the income at the 90th percentile divided by the income at the 10th percentile. It is equivalent to the average (median) income of the top 20% (quintile 5) divided by the average income of the bottom 20% (quintile 1). The higher the number, the greater the gap between those with high incomes and those with low incomes.

Main Findings

The 90:10 ratios both increased slightly in FYE 2024 to 4.1 BHC and 5.2 AHC, respectively. These measures have returned to the same levels as FYE 2020. See Table 2.1ts and 2.2ts for full data.

Figure 8: Weekly net equivalised disposable household income BHC by percentile, FYE 2024

Interpretation

Percentiles divide the population, when ranked by household income, into 100 equal sized groups. The chart indicates the amount of weekly net equivalised disposable household income an individual requires to sit at each percentile of the UK income distribution.

Main Findings

Income BHC at the 10th percentile is just under half of the median income (50th percentile) implying that around 10% of the population have less than half of the median household income BHC.

Incomes increase sharply past the 90th percentile BHC. In FYE 2024, income at the 90th percentile was almost double that of the median, whilst the top 3% of the population (97th percentile and above) have around three times the income of the median individual.

Full details are in the publication charts file.

Annual net equivalent disposable household income BHC by household type at different percentiles of the FYE 2024 UK distribution

Percentile	Single individual	Couple with no children	Couple with two children under 14
10th	£10,900	£16,300	£22,800
50th	£22,800	£34,000	£47,500
90th	£44,500	£66,500	£93,000
97th	£66,800	£99,600	£139,500

Interpretation

To analyse incomes by percentile, the population is ordered according to their net equivalised disposable household income. The annual income required to be at a given point in the distribution is different for different household types. See section 12 for more information on equivalisation in HBAI.

Main Findings

Larger families require a higher level of household income to achieve similar living standards (based on a household income measure) to smaller families.

To lie in the top half of the income distribution in FYE 2024, a single individual needed an annual household income over £22,800, compared to a couple with two children under 14 who required a combined annual household income over £47,500.

A single individual with an annual household income of over £44,500 would sit above the 90th percentile in the distribution in FYE 2024, implying their income exceeded that of 90% of the UK population. A couple with two children under 14 receiving the same level of combined annual household income would lie just below the middle of the income distribution and be considered to have slightly less than average (median) household income.

Question 5

5.  Sources of income

Accepted Answer

The majority of household income in the UK comes from either earnings or state support. Cost of living payments support schemes were introduced in FYE 2023 and continued in FYE 2024 to provide additional support to families. Income from these sources is primarily categorised as state support in the FYE 2024 estimates, apart from the Warm Home Discount and Scottish Winter Heating Payment schemes, which are classified as miscellaneous income. Please see the Households below average income series: quality and methodology information report FYE 2024 for more information.

Figure 9: Income sources as a percentage of gross income by decile, FYE 2024

Percentiles 1-3 and 98-100 are excluded because of large statistical uncertainty. This means deciles 1 and 10 are not true deciles (covering percentiles 4-10 and 91-97 respectively). Percentages may not always sum to 100% due to rounding.

Interpretation

The charts show the different sources of gross income by decile, ranking the population by income and dividing into 10 equal-sized groups (deciles). Income components are all considered before tax (gross). This is a different definition of income from that used elsewhere in the HBAI report.

Main Findings

Higher income households receive a larger proportion of their income from earnings, a trend which builds moving up the income distribution. Lower income households receive more of their income from state support. In FYE 2024:

earnings accounted for 40% of gross income for individuals in the 1st decile compared to around 85% for individuals in the 10th decile
around 80% of the UK population (those in the third income decile and above) received a higher proportion of their household income from earnings than from state support

Figure 10: Sources of income for households containing only working-age adults, FYE 2024

Across all deciles, earnings is the main source of gross income for households containing only working-age adults, with no children. In the lowest decile, 49% of income is from earnings, compared to around 35% from state support. For the highest decile, almost all income is from earnings.

Figure 11: Sources of income for households containing children, FYE 2024

For households containing children, receipt of state support generally makes up a larger proportion of income compared to households containing only working-age adults due to greater eligibility for state support (including Universal Credit and child benefit).

These households typically contain younger working-age adults, so receipt of occupational pensions does not feature as a main income source.

Figure 12: Sources of income for households containing pensioners and no children, FYE 2024

In the bottom half of the income distribution (deciles 5 and below), households containing pensioners and no children receive most of their income from state support (particularly the state pension).

The share of income received from occupational pensions steadily increases until decile 9, and then decreases slightly.

The share of income received from different sources does not always follow a step change across the income distribution. For example, the proportion of income from earnings and investments fluctuates across deciles. For decile 10, 30% of income is from earnings.

Full details are in the publication charts file.

Question 6

6.  Low-income indicators

Accepted Answer

The percentage of individuals in relative low income BHC and AHC remained the same. The absolute measure of low-income BHC increased in FYE 2024.

These changes were not statistically significant.

Relative low income

Figure 13: Percentage of individuals in relative low income, FYE 2003 to FYE 2024

Interpretation

The relative low-income threshold is set as a proportion (60%) of the UK average (median) net equivalised household income and moves each year as average income changes. It is used to measure the number and proportion of individuals who have income below this threshold. Estimates are also available for below 50% and 70% of the median.

The percentage of individuals in relative low income depends on changes in median incomes, and how changes in the income of those below the low-income threshold compare to changes in the median.

Main Findings

This year, the percentage of the population in relative low income, before housing costs, has remained the same because average incomes for those around the low-income threshold have fallen by around the same rate as those around the median.

On average, changes in housing costs for those near the low-income threshold have changed in line with those near the median, in relative terms, resulting in no measured change to the relative low income, after housing costs measure.

The percentage of individuals in relative low income BHC is 17%, the same as last year, and 21% for AHC, again unchanged (changes are rounded to the nearest percentage point).

Both the BHC measure and AHC measures are 1 percentage point lower than in FYE 2020. Prior to the pandemic, there was an upward trend in the percentage of individuals in relative low income BHC.

Absolute low income

Figure 14: Percentage of individuals in absolute low income, FYE 2003 to FYE 2024

Interpretation

Absolute low income takes the 60% of median income threshold from FYE 2011 and then fixes this in real terms (i.e. the line moves with inflation). This is designed to assess the extent to which low incomes are keeping pace with inflation. It measures the number and proportion of individuals who have incomes below this threshold. We also publish measures using thresholds at 50% or 70% of the FYE 2011 median.

The percentage of individuals in absolute low income will decrease if individuals with lower incomes see their incomes rise by more than inflation.

Main Findings

This year our central estimate for the absolute measure BHC has increased by 1 percentage point since FYE 2023. The AHC measure remained the same as last year.

The percentage of individuals in absolute low income BHC was 15% in FYE 2024 while the percentage AHC was 18%. Prior to last year, there had been a general downward trend in the percentage of individuals in absolute low income.

See Tables 3.1tr (relative) and 3.2tr (absolute) for full data.

Household Food Security

This publication includes statistics on household food security for all UK individuals and those living in low-income households. Information on household food security at a household level can be found in the Family Resources Survey: financial year 2023 to 2024 publication.

Interpretation

To measure household food security, questions are asked of the person in the household who knows the most about buying and preparing food. In common with the rest of the FRS, the focus is on the period of 30 days leading up to interview. The questions are comparable to those used by other public bodies in the UK, and internationally. From the questions, a ten-point household score is generated, and the household is given a food security status:

High food security (score = 0): The household has no problem, or anxiety about, consistently accessing adequate food
Marginal food security (score = 1 or 2): The household had problems at times, or anxiety about, accessing adequate food, but the quality, variety, and quantity of their food intake were not substantially reduced
Low food security (score = 3 to 5): The household reduced the quality, variety, and desirability of their diets, but the quantity of food intake and normal eating patterns were not substantially disrupted
Very low food security (score = 6 to 10): At times during the last 30 days, eating patterns of one or more household members were disrupted and food intake reduced because the household lacked money and other resources for food
Food secure households: Households with high or marginal food security. Food secure households are considered to have sufficient, varied food to facilitate an active and healthy lifestyle
Food insecure households: Households with low or very low food security. Food insecure households have a risk of, or lack of access to, sufficient, varied food

More details are available in the Family Resources Survey: background information and methodology report.

Main Findings

The percentage of individuals living in food insecure households increased in FYE 2024 for those on low incomes.

Eleven per cent of individuals in the UK population lived in a food insecure household in FYE 2024, which was the same proportion as for FYE 2023.

Household food insecurity increased for those in low income. Twenty-four per cent of individuals in relative low income BHC, and 25% AHC, lived in a food insecure household. This was an increase of 2 percentage points and 1 percentage point, respectively. A similar degree of change was seen amongst individuals in absolute low income.

See tables 9.1ts, 9.2ts and 9.3ts for full details.

Food Bank Usage

This publication also includes statistics on food bank usage for all UK individuals and those who are living in low-income households. Information on food bank usage at a household level can be found in the Family Resources Survey: financial year 2023 to 2024 publication.

Note that the figures for food bank usage amongst the UK population are rounded to the nearest 0.1%. This ensures any movements in the numbers using food banks in a large population are accurately reflected in the reported percentages. For lower level breakdowns of the population, figures are still reported to the nearest percentage point.

Interpretation

A new series of questions was added to the FRS for FYE 2022 on the topic of food bank usage. Food bank usage questions are asked of the person in the household who knows the most about food purchasing and preparation. This means that the questions do not directly ask about the food bank usage needs of children, and it cannot be determined which individual or individuals the food parcels are for. Food bank usage in the FRS refers only to visits to a food bank when emergency food supplies (food parcels) were obtained. This excludes visits to the food bank made only for other support (e.g. financial advice or mental health support).

The FRS asks food bank usage questions relating to two time periods: 12 months prior to interview, and in the 30 days prior to interview. This means that caution may be needed when making direct comparisons between the FRS results and other research on this subject.

For details on food bank questions please see the Family Resources Survey: background information and methodology report.

Main Findings

The percentage of individuals in households that had accessed a food bank within 30 days of their FRS interview increased slightly compared to FYE 2023. Of all UK individuals, 4.2% lived in a household that had accessed a food bank within the 12 months prior to their FRS interview. This has increased from 3.4% last year.

Those in low-income households were more likely to have used a food bank over the same period. Eleven per cent of individuals in relative low income BHC, lived in a household where a food bank had been used within the 12 months prior to their FRS interview. Similar levels were recorded for the AHC measure and for individuals in absolute low income. For all measures there was an increased usage compared to FYE 2023 of between 1 and 3 percentage points.

Of all UK individuals, 1.6% lived in a household that had accessed a food bank within 30 days prior to their FRS interview. This is similar to FYE 2023 where it was 1.5%.

Both relative measures show an increase in the proportion of individuals in low-income households using a food bank in the previous 30 days from 4% to 5%. For individuals in absolute low income, the proportion using food banks in the previous 30 days remained the same as for FYE 2023 at 4% (BHC) and 5% (AHC).

See tables 9.1ts, 9.2ts (relative) and 9.3ts (absolute) for full data.

Question 7

7.  Children in low-income households

Accepted Answer

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. These are: a 60% threshold relative low-income measure, a 60% threshold absolute low-income measure, and a combined 70% threshold low income and material deprivation measure. As with individuals, we report four measures of the percentage of children in low income – based on relative and absolute income, and before and after housing costs (BHC and AHC).

Compared to the overall population, children are more likely to live in low-income households. This is firstly because parents/guardians, in general, tend to earn less when their children are young compared with adults in households without children. Secondly, larger households have their incomes reduced to a greater degree during the income equivalisation process to take account of the fact that the household income must go further than for a smaller household. And thirdly, regarding AHC income, larger households also tend to have higher housing costs on average.

See Tables 4.1tr, 4.2tr and 4.5tr for full data.

The percentage of children in relative and absolute low income increased in FYE 2024.

This was mainly due to a real-terms fall in income from employment and self-employment for households with children. This represents a rebound from FYE 2023 when income from employment and self-employment increased quite markedly for households with children.

Relative low income

Figure 15: Percentage of children in relative low income, FYE 2003 to FYE 2024

Main Findings

Between FYE 2023 and FYE 2024, relative low income BHC for children increased by 1 percentage point to 23%. The relative AHC measure also increased by 1 percentage point to 31%.

The AHC measure is in line with the last set of estimates published prior to the coronavirus (COVID-19) pandemic, for FYE 2020. There was a general upward trend in both measures in the decade prior to the pandemic.

Neither change in the measures was statistically significant.

Absolute low income

Figure 16: Percentage of children in absolute low income, FYE 2003 to FYE 2024

Main Findings

Both measures of the percentage of children in absolute low income have increased since FYE 2023. The increase BHC was 2 percentage points to 20%, and AHC increased by 1 percentage point to 26% compared to FYE 2023.

Combined low income and child material deprivation

As explained in section 2, for FYE 2024, an updated suite of questions on material deprivation was introduced. On charts we have shown this as a break in the series with a dotted vertical line. We advise users not to make a direct comparison of changes in material deprivation estimates between FYE 2023 and FYE 2024. Users should refer to the Material Deprivation Technical Report for more information.

Estimates for the coronavirus (COVID-19) pandemic period (FYE 2021 and FYE 2022) continue to be presented as individual data points.

The proportion of children in material deprivation was 28% in FYE 2024 and the proportion of children in combined relative low income and child material deprivation was 16%.

Figure 17: Percentage of children in combined relative low income and child material deprivation, FYE 2005 to FYE 2024

Figure 18: Percentage of children in combined absolute low income and child material deprivation, FYE 2005 to FYE 2024

Interpretation

For this updated measure of child material deprivation, respondents are asked whether they have access to a list of 22 goods and services. A child is classified as being in combined low income and child material deprivation if they live in a family that is lacking 4 or more items and has a household income BHC below 70% of the median.

From FYE 2024 we have published additional estimates of an overall child material deprivation measure and a measure of combined low income and material deprivation after housing costs.

See table 4.9tr for details of the overall measure and tables 4.7tr and 4.8tr for the new combined AHC measure.

Measures using other thresholds of low income are available in our supplementary tables.

More details are available in the Material Deprivation Technical Report.

Main Findings

In FYE 2024 there were 4 million children in material deprivation in the UK, which was 28% of all children. The proportion of children in combined relative low income and child material deprivation was 16% and the absolute measure was 15%.

Due to the change in methodology, these estimates should not be compared directly with previous years.

For both relative and absolute low-income measures, the percentage of children in combined low income and child material deprivation increased between FYE 2019 and FYE 2023, reaching 13% for relative BHC and 11% for absolute BHC.

Movements seen in the relative measure in the decade prior to the pandemic were small but slightly downwards. The absolute measure was broadly stable in the years leading up to the pandemic, after a downward trend in the series to FYE 2017.

Household Food Security

The percentage of children living in food insecure households has increased.

Children are more likely to be living in a food insecure household compared with working-age adults and pensioners.

Eighteen per cent of children in the UK population lived in a food insecure household in FYE 2024, compared to 17% last year.

Increases in household food insecurity were greater for those in low income. Thirty-four per cent of children in relative low income BHC, and 33% AHC lived in a food insecure household. There was an increase of 4 percentage points for the BHC low-income measure and 3 percentage points for the AHC measure since last year. Changes were similar for children in absolute low income.

All measures of children in food insecure households are at their highest recorded level since they were introduced in FYE 2020.

Food Bank Usage

Children are more likely to be living in a household where a food bank has been accessed compared with working-age adults and pensioners.

The percentage of children in households that have accessed a food bank within 30 days of their FRS interview and over a 12-month period has increased.

Of all UK children, 7.7% lived in a household that had accessed a food bank within the 12 months prior to their FRS interview. This is a 2 percentage point increase over the last year.

Those in low-income households were more likely to have used a food bank over the 12 months prior to interview. Seventeen per cent of children in relative low income BHC lived in a household where a food bank had been used within the 12 months prior to their FRS interview, compared to 15% in relative low income AHC. Similar levels were recorded for individuals in absolute low income. Recorded levels increased for all measures compared to FYE 2023.

Of all UK children, 2.7% lived in a household that had accessed a food bank within 30 days prior to their FRS interview. This is a slight increase compared to FYE 2023, where it was 2.4%.

The proportion of children in low-income households using a food bank in the previous 30 days has remained stable across all measures. This remains at 6% for all measures except for relative BHC which increased from 6% to 7%.

See Tables 9.4ts, 9.5ts (relative) and 9.6ts (absolute) for full data.

Question 8

8.  Working-age adults in low-income households and changes in low income by work status

Accepted Answer

Working-age adults make up around 60% of the UK population. As such, changes in income for this group drive overall results more than changes amongst children and pensioners (with these groups making up 22% and 18% of the population respectively). Working-age adults also receive a greater proportion of their income from earnings and so changes in their incomes are more sensitive to changes in the labour market.

See Tables 5.1tr, 5.2tr, 5.2ts, 5.7tr, 5.8tr, 5.11ts, and 4.14ts for full data.

The percentage of working-age adults in relative and absolute low income remains stable.

Figure 19: Percentage of working-age adults in relative low income, FYE 2003 to FYE 2024

Figure 20: Percentage of working-age adults in absolute low income, FYE 2003 to FYE 2024

Main Findings

The percentage of working-age adults in relative low income BHC remained at the same level as in FYE 2023 at 15%. The proportion in relative low income AHC fell by 1 percentage point to 19%. The relative low-income estimates for FYE 2024 are broadly consistent with the long-term trend.

Absolute low income BHC increased by 1 percentage point to 13%, whereas the AHC measure did not change. In the years from FYE 2012 to FYE 2020, there was a broad downward trend in both measures.

None of the changes in the measures were statistically significant.

Percentage and composition of children and working-age adults in low income by work status

Estimates of low income by family work status are not available for FYE 2021 due to coronavirus (COVID-19) pandemic data quality issues. Figures 21 and 22 link the FYE 2020 and FYE 2022 data points.

Figure 21: Percentage of children in relative low income BHC by family work status, FYE 2003 to FYE 2024

Main Findings

In FYE 2024, 52% of children in workless families were in low income.

This figure has fallen since FYE 2023, although overall there has been an upward trend since FYE 2015. There was a downward trend in the measure prior to FYE 2015.

In comparison, 18% of children in working families were in low income. This estimate is higher than the 17% recorded in FYE 2023, but lower than the 19% recorded in FYE 2020. Prior to the coronavirus (COVID-19) pandemic, there had been an upward trend in the measure.

The smaller size of the workless group (17% of working age adults) compared to the working group (83%), means that there is more variability in the low-income estimates for this group between years.

Figure 22: Percentage of working-age adults in relative low income BHC by family work status, FYE 2003 to FYE 2024

Main Findings

Working-age adults in workless families are less likely to be in low income than children in workless families. In FYE 2024, 36% of working-age adults in workless families were in low income. This is lower than prior to the pandemic and has remained the same as for FYE 2023. Prior to the pandemic, the trend in this measure was broadly stable.

In comparison, 10% of working-age adults in working families were in low income in FYE 2024. The trend in this measure has been stable over the timeseries.

Combined low income and working-age material deprivation

As explained in section 2, for FYE 2024, an updated suite of questions on material deprivation was introduced. On charts we have shown this as a break in the series with a dotted vertical line. We advise users not to make a direct comparison of changes in material deprivation estimates between FYE 2023 and FYE 2024. Users should refer to the Material Deprivation Technical Report for more information.

Estimates for the coronavirus (COVID-19) pandemic period (FYE 2021 and FYE 2022) continue to be presented as individual data points.

The proportion of working-age adults in material deprivation was 23% in FYE 2024 and the proportion of working-age adults in combined relative low income and material deprivation was 10%.

Figure 23: Percentage of working-age adults in combined relative low income and working-age material deprivation, FYE 2011 to FYE 2024

Figure 24: Percentage of working-age adults in combined absolute low income and working-age material deprivation, FYE 2011 to FYE 2024

Interpretation

The methodology for measuring of combined low income and material deprivation for working-age adults is the same as for children, except measurement is based on a list of 21 goods and services and a working-age adult is defined as being in material deprivation if they are lacking 5 or more items. As with children, a working-age adult is classified as being in combined low income and material deprivation if they lack 5 or more items and have a household income BHC below 70% of the median. Measures using other thresholds of low income are available in the supplementary tables.

From FYE 2024 we have published additional estimates of an overall working-age material deprivation measure and a measure of combined low income and material deprivation after housing costs.

See table 5.11tr for details of the overall measure and tables 5.9tr and 5.10tr for the new combined after housing costs measure.

Main Findings

In FYE 2024 there were 9.3 million working-age adults in material deprivation in the UK, which was 23% of all working-age adults. The proportion in combined relative low income and working-age material deprivation was 10% and the absolute measure was 8%.

Due to the change in methodology, these estimates should not be compared directly with previous years.

For the period to FYE 2023, both measures showed a downward trend in the years prior to the pandemic, with a steeper reduction in the absolute measure over the period since the series began in FYE 2011.

Measures using other thresholds of low income are available in our supplementary tables.

More details are available in the Material Deprivation Technical Report.

Household Food Security

The percentage of working-age adults living in food insecure households has remained stable.

Eleven per cent of working-age adults in the UK population lived in a food insecure household in FYE 2024, which is unchanged from last year.

Twenty-six per cent of working-age adults in relative low income BHC lived in a food insecure household. The proportion was the same for those in relative low income AHC. This was an increase of 2 percentage points for BHC since last year, whereas for AHC there was no change. These measures are at their highest recorded level since they were introduced in FYE 2020.

Food Bank Usage

The percentage of working-age adults in households that have accessed a food bank within 30 days of their FRS interview has increased. Over a 12-month period, there is a similar increase.

Of all UK working-age adults, 3.9% lived in a household that had accessed a food bank within the 12 months prior to their FRS interview. This is a 0.5 percentage point increase compared to last year.

In FYE 2024, the percentage of working-age adults in low-income households that used a food bank increased compared to FYE 2023. Eleven per cent of working-age adults in relative low income BHC lived in a household where a food bank had been used within the 12 months prior to their FRS interview, compared to 9% last year. The proportion for the relative AHC measure was also 11%, which represented a 1 percentage point increase. Similar levels of usage were seen in the absolute low-income measures.

Of all UK working-age adults, 1.6% lived in a household that had accessed a food bank within 30 days prior to their FRS interview. This is an increase compared to FYE 2023, where it was 1.4%.

In FYE 2024, 5% of working-age adults in relative low income BHC and AHC lived in a household where a food bank had been used in the last 30 days. This was an increase of 1 percentage point for both BHC and AHC. The proportion was also 5% for both absolute measures, remaining at the same levels as FYE 2023.

See Tables 9.7ts, 9.8ts (relative) and 9.9ts (absolute) for full data.

Question 9

9.  Pensioners in low-income households

Accepted Answer

Over three-quarters of pensioners live in homes that are owned outright (compared to a quarter of working-age adults) and so face minimal housing costs. This means the percentage of pensioners in low-income households tends to be lower AHC than BHC, unlike for children and working-age adults.

As only a small proportion of pensioners have income from employment, trends in low income for this group are influenced more by how the value of state or personal and occupational pensions change relative to inflation and relative to growth in earnings for the population below state pension age.

The percentage of pensioners in relative low income has remained stable. The percentage of pensioners in absolute low income has increased by 1 percentage point for both BHC and AHC.

See Tables 6.1tr, 6.2tr, and 6.7tr for full data.

Figure 25: Percentage of pensioners in relative low income, FYE 2003 to FYE 2024

Figure 26: Percentage of pensioners in absolute low income, FYE 2003 to FYE 2024

Main Findings

The percentage of pensioners in relative low income BHC increased very slightly (by 0.3 percentage points) to 19% and remained unchanged at 16% AHC in FYE 2024.

Absolute low income BHC for pensioners has increased in FYE 2024, by 1 percentage point to 16%. This is slightly higher than the pre-pandemic level. Absolute low income AHC has also increased by 1 percentage point to 13%, which is broadly in line with pre-pandemic levels.

None of the changes to these four measures were statistically significant.

The measured changes for pensioners BHC are higher than for working-age adults, and lower than for children. Pensioner incomes increased slightly overall in FYE 2024 due to increases in the State Pension, despite reduced cost of living support. However, this overall picture masks variation across the income distribution.

The relative low income BHC measure is now in line with levels measured in FYE 2020, pre-pandemic, and the AHC measure is 2 percentage points lower. This reflects the higher levels of outright home ownership of pensioners, meaning they were more protected from increases in housing costs seen for non-pensioners over the period (due to inflation and increasing mortgage interest rates). Between FYE 2011 and FYE 2020 there was a gradual upward trend in both relative measures.

Pensioners in the top third of the income distribution saw their incomes increase quite considerably, whereas incomes decreased overall in the bottom two-thirds of the income distribution. In the bottom quintile, incomes fell because the reduction in cost of living support (particularly the removal of the Energy Bills Support Scheme worth £400 and council tax rebate worth £150) outweighed increases from benefits and the State Pension. This was true even for those receiving Pension Credit and hence qualifying for an increase in low-income benefits and tax credits Cost of Living Payments (£900 in FYE 2024 compared with £650 in FYE 2023).

Material Deprivation

As explained in section 2, for FYE 2024, an updated suite of questions on material deprivation was introduced. On charts we have shown this as a break in the series with a dotted vertical line. We advise users not to make a direct comparison of changes in material deprivation estimates between FYE 2023 and FYE 2024. Users should refer to the Material Deprivation Technical Report for more information.

Estimates for the coronavirus (COVID-19) pandemic period (FYE 2021 and FYE 2022) continue to be presented as individual data points.

The proportion of pensioners in material deprivation was 11% in FYE 2024

Figure 27: Percentage of pensioners in material deprivation, FYE 2010 to FYE 2024

Interpretation

The methodology for measuring material deprivation for pensioners is broadly the same as for children and working-age adults, except measurement is based on a list of 19 goods and services and a pensioner is defined as being in material deprivation if they are lacking 4 or more items. Users should refer to the Material Deprivation Technical Report for more information.

Main Findings

In FYE 2024, there were 1.3 million pensioners in material deprivation in the UK, which was 11% of all pensioners.

Due to the change in methodology, these estimates should not be compared directly with previous years.

In the period FYE 2010 to FYE 2023, the proportion of pensioners in material deprivation was stable.

Household Food Security

The percentage of pensioners living in food insecure households remained unchanged compared to FYE 2023.

Pensioners in relative low income BHC are much less likely to live in a food insecure household compared with working-age adults and children in low income BHC.

Three per cent of pensioners in the UK lived in a food insecure household in FYE 2024, which was the same proportion as last year.

The percentage is similar for pensioners in low-income households. In FYE 2024, 4% of pensioners in relative low income BHC or absolute low income BHC lived in a food insecure household. These figures were 1 percentage point lower than in FYE 2023.

For relative and absolute low income AHC, there was a 1 percentage point increase in the proportion of low-income pensioners in food insecure households, to 7%. As with children and working-age adults, this was the highest estimate since the measures were introduced in FYE 2020.

The proportion of pensioners that lived in households with a high food security status was 94%, which was the same as FYE 2023 and a fall of 2 percentage points compared to FYE 2022.

Food Bank Usage

Pensioners remain very unlikely to have accessed a food bank.

Of all UK pensioners, 0.8% lived in a household that had accessed a food bank within the 12 months prior to their FRS interview. This is the same estimate as for FYE 2023.

In FYE 2024, 1% of pensioners in relative or absolute low income BHC lived in a household where a food bank had been used within the 12 months prior to their FRS interview. For relative and absolute low income AHC, this figure was 2%. This percentage is stable compared to last year and is broadly the same as the overall figure for UK pensioners.

The estimates suggest a slight movement towards more pensioner low-income households having accessed a food bank within the last 30 days in FYE 2024, but definitive conclusions cannot be drawn due to the smaller sample sizes involved and percentages being lower than 1%.

See Tables 9.10ts, 9.11ts (relative) and 9.12ts (absolute) for full data.

Further DWP statistics on Pensioners’ Incomes are published annually alongside HBAI.

Question 10

10.  People in low-income households, by disability in the family

Accepted Answer

Almost 27 million individuals (or 40%) lived in a family where someone was disabled in FYE 2024. This consisted of approximately 6 million children, 14 million working-age adults and 7 million pensioners.

The percentage of individuals in a disabled family and in relative low income increased by 1 percentage point before housing costs and decreased by 1 percentage point after housing costs.

None of the changes reported in this section were statistically significant.

See tables 7.1tr, 7.3tr, 7.5tr and 7.7tr for full data.

Definitions

Disabled people are identified as those who report any physical or mental health condition(s) or illness(es) that last or are expected to last 12 months or more, and which limit their ability to carry out day-to-day activities a little, or a lot. This is in line with the Equality Act definition.

The means of identifying people with a disability has changed over time, with different criteria applied for FYE 2003 to FYE 2004; FYE 2005 to FYE 2012; and FYE 2013 to date. As such, changes over time in the number of individuals with disabilities could be affected by the changes in the disability questions.

Different individuals may have different interpretations of health conditions or question wording, meaning that changes to the disability questions may have had a different effect on different groups.

Therefore, comparisons between estimates from FYE 2013 onwards with earlier years should be made with caution.

Estimates of low income by family disability status are not available for FYE 2021. All charts in this section link the FYE 2020 and FYE 2022 data points. Changes to the FRS fieldwork from face-to-face interviewing to telephone during coronavirus (COVID-19) pandemic affected the composition of the achieved sample, and sample size was significantly reduced, affecting the quality of the estimates for FYE 2021.

Figure 28: Percentage of individuals in relative low income BHC, by family disability, FYE 2003 to FYE 2024

Main Findings

Those living in a family with a disabled member are more likely to be in low income than non-disabled families. The percentage of individuals in families where someone is disabled in relative low income BHC is 5 percentage points higher than families where no-one is disabled.

Figure 28 shows that in FYE 2024, the percentage of individuals in families where someone is disabled and in relative low income BHC increased by 1 percentage point to 20%. The FYE 2024 percentage is similar to the longer-term flat trend in the measure seen prior to FYE 2020. Low-income rates for those individuals in families without a disabled member have also remained stable.

Figure 29: Percentage of individuals in relative low income AHC, by family disability, FYE 2003 to FYE 2024

Main Findings

Relative low income AHC for those in families where someone is disabled was 23%, a fall of 1 percentage point on FYE 2023. This estimate is the lowest recorded since the change in disability definition in FYE 2013. This year, the gap between low-income rates for those in disabled and non-disabled families continued to narrow.

Figure 30: Percentage of individuals in absolute low income BHC, by family disability, FYE 2003 to FYE 2024

Figure 31: Percentage of individuals in absolute low income AHC, by family disability, FYE 2003 to FYE 2024

Main Findings

In FYE 2024, absolute low income BHC increased by 1 percentage point to 17% for individuals in families where someone is disabled. The AHC measure remained at 20%, continuing the longer-term downward trend. For individuals in families without a disabled member, was an increase in the proportion in low income for both BHC and AHC measures.

For both relative and absolute measures, there is no direct relationship between the trends for those with and without disabled family members. Several factors could affect the average household income where someone in a family is disabled. We know, for example, that working-age adults with disabilities are less likely to be in employment, and that disability is more prevalent amongst pensioners which can help explain why AHC measures have seen more downward movement in FYE 2024. Changes in low-income rates will also depend not only on changes in the composition of the group but also differences in the growth of income components (such as income from employment) compared to non-disabled households.

Figure 32: Percentage of children, working-age, and pensioners in relative low income BHC where someone in the family is disabled, FYE 2003 to FYE 2024

Figure 33: Percentage of children, working-age, and pensioners in absolute low income BHC where someone in the family is disabled, FYE 2003 to FYE 2024

Main Findings

The charts above show that the relative low-income rate BHC for children in disabled families was 26%; an increase of 1 percentage point since FYE 2023 and a further increase since FYE 2022. There has been a decrease over the last two years for the AHC measure for children in disabled families.

Working-age adults in disabled families showed a decline in their absolute low-income rates BHC up until FYE 2023 but then showed an increase for FYE 2024. For disabled pensioners, the rate has increased in the last year.

There were large reductions in rates of low income for all groups in disabled families between FYE 2008 and FYE 2012. From FYE 2013, when disability definitions changed, to FYE 2020, prior to the pandemic, rates for all groups were slightly increasing using the relative measure, and stable using the absolute measure.

Question 11

11.  Measuring income in HBAI

Accepted Answer

HBAI uses data from the Family Resources Survey (FRS) to derive a measure of disposable household income. Adjustments are made to take account of the size and composition of households to make figures comparable.

In FYE 2024, the FRS covered a sample of just under 17,000 households in the United Kingdom. This was smaller than the 25,000 achieved in FYE 2023. For FYE 2024 there was a target of 20,000 achieved households, comparable to the years prior to the COVID-19 pandemic. In general, this means that the degree of uncertainty around this year’s survey estimates is larger than last year.

Sampling Error - Results from surveys are estimates and not precise figures - in general terms the smaller the sample size, the larger the uncertainty.

Confidence intervals help to interpret the uncertainty of these estimates, by showing the range of values around the estimate that the true result is likely to be within.

Non-sampling Error - These results are based on data from respondents to the survey. If people give inaccurate responses or certain groups of people are less likely to respond this can introduce biases and errors. This non-sampling error can be minimised through effective and accurate sample and questionnaire design and extensive quality assurance of the data. However, it is not possible to eliminate it completely, nor can it be quantified.

Income - This is measured as total weekly household income from all sources (including child income) after tax, national insurance, and other deductions. Income measures are presented before and after housing costs (rent, mortgage interest payments, buildings insurance etc.)

A household income measure implicitly assumes that all members of the household benefit equally from the household’s income and so appear at the same position in the income distribution.

SPI adjustment - Estimates of mean income and some inequality measures are very sensitive to fluctuations in incomes at the top of the distribution. An adjustment to correct for this is made to ‘very rich’ households in FRS-based results using data from HMRC’s Survey of Personal Incomes.

Key Definitions

Household - One person living alone or a group of people (not necessarily related) living at the same address who share cooking facilities and share a living room, sitting room or dining area. A household will consist of one or more benefit units or families.

Family or Benefit Unit - A single adult or a couple living as married and any dependent children.

Equivalisation - An adjustment is made to income to make it comparable across households of different size and composition. 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. Different equivalisation scales are applied before and after housing costs, with the BHC example below. AHC scales can be found in our HBAI Quality and Methodology Information Report.

Equivalisation scales used in HBAI (Before Housing Costs)

Equivalisation allows comparisons to be made of individuals of different ages and different sized households. The figure above shows the process of how income undergoes the process of equivalisation for three different example household types – all of which have a weekly net income before equivalisation of £300, but after equivalisation have different weekly net incomes:

Example 1: Couple without children – have individual equivalisation weights of 0.67 (first adult) and 0.33 (second adult) which sum to 1. For this household their weekly net income before equivalisation is £300 and their weekly net income after equivalisation is £300 divided by 1, so also £300. A couple with no children is the reference point.

Example 2: Couple with 2 children under 14 years have equivalisation weights of 0.67 (first adult), 0.33 (second adult), 0.2 (first child under 14 years) and 0.2 (second child under 14 years) – these sum to 1.4. For this household their weekly net income before equivalisation is £300, and their net weekly income after equivalisation is £300 divided by 1.4, so £214. Compared to the reference point, income has decreased as a couple with children need a higher income to enjoy the same living standard.

Example 3: Single adult household has equivalisation weight of 0.67. For this household their weekly net income before equivalisation is £300 and their weekly net income after equivalisation is £300 divided by 0.67, so £448. Compared to the reference point, income has increased as a single person needs a lower income to enjoy the same living standard.

Inflation is the speed at which the prices of goods and services rise or fall. The use of different inflation measures influences trends in average household income and absolute low-income measures in HBAI.

HBAI uses variants of CPI to adjust for inflation to look at how incomes are changing over time in real terms i.e. if, for example, average incomes rise by 3% in cash terms, but inflation is higher at 5%, then we will record a fall in average incomes as the real average purchasing power of incomes has fallen.

Question 12

12.  Long-term trends (data prior to FYE 1995 are not Accredited Official Statistics)

Accepted Answer

Work undertaken by IFS to extend HBAI trends back to 1961 shows large increases in inequality over the 1980s.

Figure 34: Long term trend in the Gini Coefficient

Figure 35: Long term trend in Relative Low Income

Figure 36: Long term trend in Absolute Low Income

Main Findings

Looking at trends over the past 60 years, incomes across the population have increased dramatically in real terms over time, driving falls in absolute low income. This pattern has held consistently over time, with rises in absolute low income being relatively rare, although the rate of decline in the measures has slowed over the last decade.

During the 1980s, incomes for those further up the income distribution grew more quickly than for those at the bottom, driving large increases in income inequality (Gini) and in relative low income measures. Since the early 1990s, income inequality measures in the UK have remained relatively stable, although analysis by Atkinson, A. B. et al, held at the World Inequality Database suggests that increasing inequality has continued with incomes for those within the top 1% continuing to grow faster than for the rest of the distribution. Changes this far up the distribution will not be captured well in the HBAI data.

Interpretation

The increase in income inequality (and in relative low income) over the past 40 years or so has been driven in part by a significant increase in individual earnings inequality over the same period.

Partial explanations for wider trends are:

from the late-1970s there was a large rise in unemployment following the recession, accompanied by increasing inequality in earnings – driven in part by factors like increases in part-time working
from the mid-1980s increasing income inequality was further driven by incomes of those in employment pulling away from those who are economically inactive (including pensioners) as growth in employment income rose faster than for other sources such as benefits
in the late-1980s the widening of the income distribution was driven further by increases in earnings inequality, with increasing differences between wages for different occupations
by the early 1990s the picture began to stabilise with incomes of those economically inactive starting to catch up to those in employment
in the early 2000s falls in low-income measures were driven by increasing relative incomes for families with children and pensioners – driven in part by the introduction of tax credits and increases in the Basic State Pension. From 2002 onwards, the Government was committed to uprating the BSP by the higher of 2.5% and inflation. The “triple lock” was introduced in 2010

See the IFS publication for full data and Accounting for changes in inequality for detailed decomposition analysis of trends.

Question 13

13.  Strengths and limitations

Accepted Answer

The main strengths of HBAI include:

HBAI has provided the UK’s headline household income statistics since FYE 1995 using a consistent methodology. Hence, HBAI provides data on both current levels and short/medium/long term trends in incomes and the income distribution. The statistics are the UK’s primary source of poverty estimates and, with a larger sample size than ONS’s Household Finances Survey, are the main source on household incomes
Alongside statistics on low income, HBAI also measures and publishes data on other aspects of poverty. It includes statistics on levels of material deprivation, household food security, and food bank usage, including in combination with low income.
The data are subject to extensive quality control and cleaning;
- firstly, through the FRS data collection and editing processes operated by the FRS contractors and DWP (see Family Resources Survey: quality assessment report for further details); and
- secondly through the HBAI production process operated by DWP and with additional quality assurance provided by the Institute for Fiscal Studies (IFS)
HBAI follows national and international best practice regarding the measurement of household incomes (e.g. regarding income from self-employment and housing costs) and the equivalisation of household incomes (see previous section) across differing household sizes and compositions
HBAI provides headline estimates with an extensive suite of supplementary tables on the HBAI homepage, as well as user-defined breakdown tables through Stat-Xplore and in-depth analysis of case-level datasets through the UK Data Service
Given its coverage of the whole UK private household population and wide range of demographic and socio-economic data, FRS/HBAI data can be used for many purposes beyond income/poverty analysis e.g. for a wide range of policy impact analyses

The main limitations of HBAI include:

Results presented in this report are derived from a cross-sectional survey that aims to achieve a broad and representative sample size covering all groups across the UK. However, users should be aware of the inherent uncertainty in the estimates, which is common with any survey
We put significant effort into maintaining high-quality responses. Data are weighted (grossed) to align with published population totals by region, age, housing tenure, and other factors. Despite addressing many dimensions through weighting, it is not possible to account for every potential interaction. For example, while the number of households in each housing tenure is controlled for, the number of individuals within each tenure can vary significantly. For more information, users should refer to the section on Grossing in the Households below average income series: quality and methodology information report FYE 2024
As with any survey, the data are subject to non-response bias and reporting error, despite the best efforts of survey sample design, data quality control, and cleaning. To address issues like benefit under-reporting and improve the quality of our income estimates, we plan to increase the use of administrative data from the full range of available sources. A technical report on FRS transformation, with illustrative results using DWP benefit data, was published in March 2024 alongside the FRS publication. Users should refer to the FRS Release Strategy for the most up-to-date information
Although the source FRS survey is relatively large, estimates for smaller sub-groups and geographical areas require combining multiple survey years together and/or are subject to wide confidence intervals. Also, while the equivalisation process allows household incomes to be compared across differing household sizes and compositions, the factors used are somewhat simplistic, adjusting income similarly for all people aged 14 and over in a household, regardless of whether the person is a child, working-age adult, pensioner, or disabled
The statistics treat all household members equally in terms of overall household income. This means that if the household income is below 60% of the median, all household members are considered to be in low income (‘poverty’), and vice versa. This assumption is more reasonable for related household members than for unrelated individuals living together, such as a group of young adults
Due to the extensive data processing and quality assurance required, the statistics are published around 12 months after the reporting year. More details on this process are available in the Family Resources Survey: quality assessment report. Because the survey sampling frame covers private households only, it does not include individuals living outside private households, such as those in residential care and nursing homes, university halls of residence, prisons/detention centres, or those who are rough sleepers. Further detail on the uncertainty around estimates can be found in the Households below average income series: quality and methodology information report FYE 2024

Question 14

14.  About these statistics

Accepted Answer

The income measure used in HBAI is weekly net equivalised disposable income Before Housing Costs measuring income from all sources from all household members, including:

usual net earnings from employment;
profit or loss from self-employment (losses are treated as negative income);
income received from dividends (from FYE 2022);
state support – all benefits and tax credits, including state pension;
income from occupational and private pensions;
investment income;
all maintenance payments;
income from educational grants and scholarships;
the cash value of certain forms of income in kind, including free school meals

Income is net of:

income tax and National Insurance contributions;
domestic rates and council tax;
contributions to occupational pension schemes;
all maintenance payments;
student loan repayments;
parental contributions to students living away;
ground rent and service charges

Income After Housing Costs is derived by deducting housing costs, including:

rent (gross of housing benefit);
water rates, community water charges and council water charges;
mortgage interest payments;
structural insurance premiums

Negative incomes BHC are reset to zero, but negative AHC incomes are possible.

Children are defined as individuals aged under 16; or aged 16 to 19 in full-time non-advanced education.

Pensioners are defined as individuals over their state pension age at the time they are interviewed.

These Accredited Official Statistics were independently reviewed by the Office for Statistics Regulation (OSR) in November 2012. They comply with the standards of trustworthiness, quality and value in the Code of Practice for Statistics and should be labelled ‘accredited official statistics’. Accredited Official Statistics are called National Statistics in the Statistics and Registration Service Act 2007.

Since the OSR assessment, we have continued to comply with the Code of Practice for Statistics, and have made several improvements including:

Where to find out more

Further outputs and reference tables from HBAI analysis, alongside our HBAI Quality and Methodology Information Report, giving further detail on how we estimate the measures reported here are available on the HBAI homepage.

Question 15

15.  Signposting to related statistics

Accepted Answer

The OSR review published in May 2021 recommended that income-based poverty statistics should improve the way they reference other data sources through signposting. This section has been expanded with additional links to sources to provide clearer and more detailed signposting to other income-based poverty statistics. This information will be reviewed and updated annually.

Other DWP Accredited Official and Official Statistics

Details of other Accredited Official and Official Statistics produced by the Department for Work and Pensions can be found on the DWP website 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 Accredited Official Statistics are also announced on the Government Statistics website, and in the DWP statistics release calendar.

Two other DWP publications which may be of particular interest to users with an interest in income-based poverty are:

HBAI will be a key data source for the Child Poverty Strategy. Tackling Child Poverty: Developing Our Strategy outlines that relative poverty after housing costs will be a headline measure, with further work to also consider measurement of the most severe and acute forms of poverty. The Child Poverty Taskforce is working with Devolved Governments, partner organisations and individuals to develop the Child Poverty Strategy.

Below Average Resources: a new poverty measure in development

DWP are developing a new additional poverty measure named ‘Below Average Resources’ (BAR) based on the approach proposed by the Social Metrics Commission (SMC). The BAR approach provides a more expansive view of available resources (both savings and inescapable costs) than the income measurement adopted under HBAI, and includes some methodological changes proposed by the SMC.

The Office for Statistics Regulation (OSR) Review of Income-Based Poverty Statistics recommended that the DWP assess how the SMC’s proposals can be implemented to enhance the public value of our statistics. The OSR recognised that a basket of main poverty measures is required to meet varying user needs, but that signposting and coherence between different statistics could be improved to help users navigate the varying measures. Once fully developed, the BAR measure will sit alongside and add value to DWP’s existing poverty related statistics.

The latest Official Statistics in Development publication in the series was published in January 2025.

DWP sought user feedback on the new poverty measure through an analytical consultation. The consultation response has now been published.

Other official income statistics

The UK has two main, official data sources of household income statistics: the Family Resources Survey (FRS) run by the Department for Work and Pensions (DWP) and the Household Finances Survey (HFS) run by the Office for National Statistics (ONS).

The FRS estimates underpin DWP’s Households Below Average Income (HBAI) series, which is the UK’s primary source of poverty estimates. With a larger sample size, it is also the main source on household incomes. HFS data are used to produce ONS’s Household Disposable Income Inequality (HDII) and Effects of Taxes and Benefits (ETB) series, and are the main source for considering the overall financial well-being of households.

The two sources of data are complimentary but there are some important methodological differences between them, which means that their income estimates can be different. For example, the FRS focuses on respondents’ weekly incomes at the time of interview, whereas HFS focuses more on annual income. The treatment of pension contributions also differs, with ONS’s estimate of Gross Household Income being calculated before pension contributions. Further details are available in the income and earnings statistics guide.

The ONS interactive tool is an additional resource which can be used to identify sources of statistics on income and earnings, and their key features. Alongside the HDII and ETB series.

What do you think?

We are constantly aiming to improve this report and its associated commentary. We would welcome any feedback you might have and would also be particularly interested in knowing how you make use of these data to inform your work. Please contact us via email: team.hbai@dwp.gov.uk.

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Family Resources Survey (FRS) fieldwork during FYE 2024

1. Main stories

Median Household Income - Decrease to £650 (BHC) and £562 (AHC) in FYE 2024

Income Inequality – Gini coefficient remained stable for BHC and AHC

Low-income measures - relative BHC and AHC remained stable; the absolute BHC measure increased and absolute AHC remained stable.

2. What you need to know

Income measures

Survey data

Confidence intervals for the percentage of individuals in low income (BHC), United Kingdom, FYE 2024

Confidence intervals for the percentage of individuals in low income (AHC), United Kingdom, FYE 2024

Additional tables and data

New for this publication

Updated material deprivation measures

Treatment of Cost of Living Support Schemes, Warm Home Discount and Scottish Winter Heating Payment

Review of the imputation methodology for Scottish Child Payment

Correction to Educational Attainment

Correction to Cost of Living Support Schemes for FYE 2023 data

Other points of note

3. The Overall Income Distribution

Average household incomes decreased in FYE 2024

Figure 5: Income distribution (BHC) for the total population, FYE 2024

Interpretation

Main Findings

Figure 6: Change in real terms income BHC by percentile, FYE 2023 to FYE 2024

Interpretation

Main Findings

4. Income Inequality

Figure 7: The 90:10 ratio measure of inequality, FYE 2003 to FYE 2024

Interpretation

Main Findings

Figure 8: Weekly net equivalised disposable household income BHC by percentile, FYE 2024

Interpretation

Main Findings

Annual net equivalent disposable household income BHC by household type at different percentiles of the FYE 2024 UK distribution

Interpretation

Main Findings

5. Sources of income

Figure 9: Income sources as a percentage of gross income by decile, FYE 2024

Interpretation

Main Findings

Figure 10: Sources of income for households containing only working-age adults, FYE 2024

Figure 11: Sources of income for households containing children, FYE 2024

Figure 12: Sources of income for households containing pensioners and no children, FYE 2024

6. Low-income indicators

Relative low income

Figure 13: Percentage of individuals in relative low income, FYE 2003 to FYE 2024

Interpretation

Main Findings

Absolute low income

Figure 14: Percentage of individuals in absolute low income, FYE 2003 to FYE 2024

Interpretation

Main Findings

Household Food Security

Interpretation

Main Findings

Food Bank Usage

Interpretation

Main Findings

7. Children in low-income households

Relative low income

Figure 15: Percentage of children in relative low income, FYE 2003 to FYE 2024

Main Findings

Absolute low income

Figure 16: Percentage of children in absolute low income, FYE 2003 to FYE 2024

Main Findings

Combined low income and child material deprivation

Figure 17: Percentage of children in combined relative low income and child material deprivation, FYE 2005 to FYE 2024

Figure 18: Percentage of children in combined absolute low income and child material deprivation, FYE 2005 to FYE 2024

Interpretation

Main Findings

Household Food Security

Food Bank Usage

8. Working-age adults in low-income households and changes in low income by work status

Figure 19: Percentage of working-age adults in relative low income, FYE 2003 to FYE 2024

Figure 20: Percentage of working-age adults in absolute low income, FYE 2003 to FYE 2024

Main Findings

Percentage and composition of children and working-age adults in low income by work status

Figure 21: Percentage of children in relative low income BHC by family work status, FYE 2003 to FYE 2024

Main Findings