Measuring poverty based on income
Each year, the government publishes a survey of income poverty in the UK called Households Below Average income (HBAI). This survey sets the poverty line in the UK at 60 per cent of the median UK household income. In other words, if a household’s income is less than 60 per cent of this average, HBAI considers them to be living in poverty. This is the measure of relative poverty, whereas absolute poverty is where a household’s income is less than 60 per cent of the median as it stood in 2011.
22 per cent of people are living in poverty, equivalent to 14.4 million people, after their housing costs are taken into account. 29 per cent of children live in households below the poverty line (after housing costs). By comparison, 18 per cent of pensioners live below the poverty line.
Calculating poverty after housing costs give a more accurate measure of how much families have to live on.
Measuring poverty based on hardship
The Policy and Social Exclusion surveys (1983-2011) established the public view of socially-perceived necessities and how many households are going without these essentials.
Modest increases in income reduce hardship swiftly and effectively. In 2001, child poverty was 400,000 lower than in 1999 and severe hardship among out-of-work families almost halved – from four in 10 to less than one-quarter in just two years.