Poverty in Scotland and the UKCommunities Analysis Division– September 2015

While relative poverty in Scotland fell in 2013/14, it remained flat in the UK.In 2013/14 the rate of relative poverty in Scotland, both before and after housing costs, decreased while for the UK poverty before and after housing costs was unchanged. In the UK 15% of people were in poverty before housing costs, and 21% after housing costs, the same as the previous year. In Scotland, relative poverty before housing costs decreased to 14% (from 16%), and after housing costs 18% of people were in poverty (from 19%).

For all population groups in 2013/14, relative poverty in Scotland was lower than that for the UK, both before and after housing costs. This reverses the position in 2012/13 where poverty before housing costs in Scotland was higher than in the UK. Poverty after housing costs in Scotland has remained lower than that in the UK since 2001/02.

Poverty has fallen faster in Scotland than in the UK.Since 2000/01, relative poverty before housing costs has fallen in Scotland from 21% to 14%. The decrease in the UK has been smaller, from 19% to 14% in 2013/14.

After housing costs, poverty in Scotland decreased from 24% in 2000/01 to 18% in 2013/14. This compares with little change in the UK, decreasing from 23% to 21%. Poverty rates after housing costs in Scotland and the UK were similar up to 2006/07. After housing costs, poverty in Scotland has decreased since 2006/07, with an increase in 2012/13. In the UK, poverty after housing costs has remained largely unchanged.

While incomes increased in Scotland in 2013/14 and remained flat in the UK, there was little improvement in living standards .In Scotland in 2013/14, 730,000 people (14%) were living in relative poverty before housing costs. This increased to 940,000 people (18%) after housing costs. This reverses the increase in poverty before housing costs in 2012/13, but poverty after housing costs did not fall to the same extent. In the UK, median income was unchanged in 2013/14, with little change in living standards, and no change in poverty before or after housing costs.

Child poverty after housing costs in Scotland was flat in 2013/14, with an increase in the UK

Child poverty before housing costs decreased in Scotland in 2013/14, compared with no change in the UK.Child poverty in the latest year fell in Scotland, following an increase in 2012/13. In 2013/14, 14% of children were in poverty before housing costs, compared with 17% in the UK. This was a decrease from 19% in 2012/13 in Scotland, with no change in the UK. Since 2000/01, child poverty before housing costs in Scotland has fallen from 27% to 14%. In the UK the decrease has been smaller, from 23% to 17%.

After housing costs, child poverty in Scotland remained at 22% in 2013/14 and it increased to 28% in the UK (from 27%). Child poverty after housing costs has fallen faster in Scotland than the UK. Since 2000/01 child poverty in Scotland after housing costs fell from 32% to 14%, compared with a fall from 31% to 28% in the UK.

After housing costs, working age poverty is lower in Scotland than in the UK.In 2013/14, 14% of working age people were in poverty before housing costs, in Scotland and in the UK. This was a decrease from 15% in 2012/13 in Scotland and the UK. Since 2000/01, working age poverty before housing costs in Scotland has fallen from 18% to 14%. In the UK the decrease has been smaller, from 15% to 14%.

After housing costs, working age poverty in Scotland decreased to 19% (from 21%) in 2013/14. It was unchanged at 21% in the UK. Working age poverty after housing costs has remained largely flat in Scotland and in the UK since 2000/01.

After housing costs, pensioner poverty increased in 2013/14 in Scotland and in the UK.In 2013/14, 15% of pensioners were in poverty before housing costs in Scotland, compared with 16% in the UK. This was unchanged in both Scotland and the UK. Since 2000/01, pensioner poverty before housing costs in Scotland and the UK has fallen by 10 percentage points, and rates of pensioner poverty in Scotland and the UK have remained similar.

After housing costs, pensioner poverty in Scotland and the UK increased by 1 percentage point in 2013/14. Pensioner poverty after housing costs in Scotland was 12%, compared with 14% in the UK. The decrease in pensioner poverty after housing costs since 2000/01 is similar in Scotland and the UK.

In work poverty in Scotland decreased in 2013/14, but increased in the UK

The proportion of children in poverty before housing costs living in working households decreased in Scotland but increased in the UK.In Scotland, 56% of children in poverty before housing costs were living in working households in 2013/14, a fall from 59% the previous year. In the UK, 67% of children in poverty before housing costs were living in working households.

In Scotland, after housing costs, 56% of children in poverty were living in working households in 2013/14, compared with 64% in the UK. In Scotland, there was no change in the proportion of children in poverty after housing costs living in working households, while in the UK there was a small increase (from 63%).

In 2013/14, child in in-work poverty after housing costs in Scotland remains the highest it has been since 2000/01. In the UK, while it increased in the latest year it remains below the peak seen in 2010/11.

In 2013/14, working age adults in in-work poverty decreased in Scotland but increased in the UK, both before and after housing costs.In Scotland, 48% of working age adults in poverty before housing costs were in working households in 2013/14, a fall from 52% the previous year. In the UK, 63% of working age adults in poverty before housing costs were in working households, an increase from 59% the previous year.

After housing costs, 50% of working age adults in poverty in Scotland were in working households, compared with 64% in the UK. In Scotland, the proportion of working age adults in in-work poverty after housing costs decreased from 56% to 50% in the latest year, compared with an increase in the UK to 64% (from 62%).

The proportion of working age adults in poverty after housing costs in working households has generally fluctuated around 50% in Scotland. In the UK, working age adult in-work poverty after housing costs has generally increased over the period since 2000/01.

Absolute poverty in Scotland fell in 2013/14 but was unchanged in the UK

Absolute poverty before and after housing costs decreased in Scotland in 2013/14, but remained unchanged in the UK.Absolute poverty measures whether household incomes are growing in line with inflation. In 2013/14, 15% of people in Scotland were in absolute poverty before housing costs, down from 17%. In the UK 17% of people lived in absolute poverty before housing costs, unchanged from 2012/13.

After housing costs, 20% of people in Scotland lived in absolute poverty, down from 21%. In the UK, 23% of people lived in absolute poverty after housing costs, unchanged from the previous year.

Absolute poverty, before and after housing costs, fell for all groups except pensioners.In 2013/14 the rate of absolute poverty both before and after housing costs decreased in Scotland for children and working age adults, while it remained flat in the UK. However, absolute poverty, before and after housing costs, increased for pensioners in 2013/14, both in Scotland and the UK. While increases in earnings contributed to the decrease in poverty rates for other groups, absolute pensioner poverty increased as increases in Basic State pension and Pension Credit were below the level of RPI inflation.

Median income in Scotland increased in 2013/14 but was unchanged in the UK

Median income increased in Scotland in 2013/14, but was unchanged in the UK. Scottish equivalised median household income was £24,000 (£460 per week), up from £23,700 in 2012/13. In the UK it remained at £23,600 (£453 per week).

In 2013/14, average real terms household income in the UK was at levels last seen in 2000/01. Average real terms household income in Scotland in 2013/14 was at levels last seen in 2003/04.

The increase in income in 2013/14 was primarily due to employment growth and increases in hours worked. Average earnings for those already in work did not increase in line with inflation. Increases in the personal tax allowance helped to increase income for those earning enough to pay tax. However this was balanced against further welfare reform in 2013/14, and benefits for working age adults increasing below the inflation rate.

Income inequality in Scotland decreased in 2013/14 but was unchanged in the UK

Income inequality in Scotland decreased in Scotland but not in the UKThe Gini measures the distribution of household income. A smaller figure represents a more even distribution of income.

In 2013/14, the Gini in Scotland decreased to 30 (from 31), while in the UK it remained at 34. In Scotland, the reduction in income inequality was due to the largest increases in household income for the lower income households, with decreases in income for the highest income households. In the UK, while incomes increased for the lowest income households, they also increased for the highest income households.