Section 1: Relative and Absolute Poverty

Important Information for 2023 Statistics

Please be advised: due to the impact of the COVID-19 pandemic, the Households Below Average Income (HBAI) data release for 2021/22  remains significantly reduced, and less reliable than seen in previous years (full explanation available here).

Due to this, it will not be possible to make year on year comparisons, or to draw conclusions about recent poverty trends. It is therefore recommended that poverty data for 2021/22 is instead viewed as a point in time estimate of poverty levels only.

Relative Poverty – number of people affected in the UK

Relative low income measures the number and proportion of individuals who have household incomes below 60% of the median average in that year – and is used to look at how changes in income for the lowest income households compare to changes in incomes near the average.

Table 1.1

In 2021/22, 11 million people (17% of the UK) were living in relative poverty Before Housing Costs were deducted (BHC).
14.4 million people (22% of the UK) were living in relative poverty After Housing Costs were deducted (AHC).

REMINDER: Caution is advised in making year-on-year comparisons after 2019/20.  This is due to the smaller sample sizes and differing collection methods carried out for surveys in 2020/21 and 2021/22. It is recommended that poverty data for 2021/22 is viewed as a point in time estimate for the number of people in poverty in the UK, rather than for trend analysis and as an indicator that poverty levels are falling.

Absolute Poverty – number of people affected in the UK

Absolute low income measures the proportion of individuals who have household incomes 60% below the average in 2010/11, adjusted for inflation. It is used to look at how changes in income for the lowest income households compare to changes in the cost of living.

Table 1.2

In 2021/22, 8.9 million people (13% of the UK) were living in absolute poverty Before Housing Costs were deducted (BHC).
11.4 million people (17% of the UK) were living in absolute poverty After Housing Costs were deducted (AHC).

REMINDER: Caution is advised in making year-on-year comparisons after 2019/20.  This is due to the smaller sample sizes and differing collection methods carried out for surveys in 2020/21 and 2021/22. It is recommended that poverty data for 2021/22 is instead viewed as a point in time estimate for the number of people in poverty in the UK, rather than for trend analysis and as an indicator that poverty levels are falling.

Poverty Estimates for Leeds

Table 1.3

The DWP’s estimates for Absolute and Relative Poverty are only available at a national level, however an estimate for Leeds can be calculated using nationally informed assumptions against the Leeds population figure for the same year. As the latest DWP data refers to 2021/22; the ONS Mid-year Population estimates for Leeds at 2021 of 811,953 have been used in the estimates above.

For example it is reported by the DWP that there are 14.4 million people living in relative poverty in the UK, after housing costs. This was 22% of the UK population in 2021. Therefore, because Leeds is statistically considered to mirror the UK trend in terms of demographic profile, it can be assumed that 22% of the Leeds population in 2021 was living in relative poverty. This equates to 178,630 people in Leeds.

Poverty Thresholds, Income Before Housing Costs 

Income trends over time before deducting housing costs are useful where there has been an increase in housing costs because of better quality housing, and so living standards have improved.

Table 1.4

The relative poverty threshold for a couple with no children was £339/week in 2021/22 BHC. This is the threshold used when estimating the number of people in relative poverty BHC in 2021/22. A single person with no children is in poverty if they earn £227/week or less BHC.

The absolute poverty threshold for a couple with no children is £314/week. This figure is based on the 2010/11 figure and was used to estimate the numbers in absolute poverty BHC in 2021/22.

REMINDER: Caution is advised in making the year-on-year comparisons after 2019/20.  This is due to the smaller sample sizes and differing collection methods carried out for surveys in 2020/21 and 2021/22. It is recommended that poverty data for 2021/22 is instead viewed as a point in time estimate, rather than for trend analysis or as an indicator of poverty levels falling/median incomes increasing etc.

Poverty Thresholds, Income After Housing Costs

Income trends over time after deducting housing costs are useful where rents have increased for a given quality of accommodation, otherwise, for example a rise in housing benefit to offset higher rents would be counted as an income rise.

Table 1.5

The relative poverty threshold for a couple with no children was £300 week in 2021/22 AHC. This is the threshold used when estimating the number of people in relative poverty AHC in 2021/22. A single person with no children is in poverty if they earn £174/week or less AHC.

The absolute poverty threshold for a couple with no children is £270/week AHC. This figure is based on the 2010/11 figure and was used to estimate the numbers in absolute poverty AHC in 2021/22.

REMINDER: Caution is advised in making the year-on-year comparisons after 2019/20.  This is due to the smaller sample sizes and differing collection methods carried out for surveys in 2020/21 and 2021/22. It is recommended that poverty data for 2021/22 is instead viewed as a point in time estimate, rather than for trend analysis or as an indicator of poverty levels falling/median incomes increasing etc.

Further information on Relative and Absolute Poverty

Relative Poverty measures individuals who have income below 60% of median incomes. Relative poverty will fall if:

• individuals with low incomes see their incomes rise more than the Median average; or
• individuals with low incomes see their incomes fall less than the Median average.

Absolute Poverty also measures individuals who have income below 60% of median incomes, but uses the median income from 2010/11 and adjusts this in line with inflation. This is designed to assess how low incomes are faring with reference to inflation/living standards.  Absolute Poverty will fall if:

• individuals with low incomes see their incomes rise by more than inflation.

Both measures are available before and after housing costs are deducted from income.  The after housing cost measure is useful in the current economic climate as rising rents and property prices are a growing contributor to poverty.

The Leeds Poverty Fact Book includes all four measures for reference purposes, but often quotes Relative Poverty, after housing costs are deducted when discussing poverty estimates for Leeds in official reports and documents produced by the Council.

Median Income used for relative poverty calculation in 2021/22 – BHC £565 per week, AHC £500 per week.

Median income used for absolute poverty calculation in 2010/11 – BHC £524 per week, AHC £450 per week