Just under a quarter of all children living in relative poverty measured before housing costs, live in households liable to pay full council tax. This equates to around 700,000 children.
Around two fifths of children living in relative poverty measured after housing costs, live in households liable to pay full council tax. This equates to around 1.4 million children.
The average weekly council tax bill for these households is around £20 and £21 respectively.
Notes:
1. Households are defined as being in poverty if their income is less than 60 per cent. of the national median equivalised income level.
2. These figures have been derived using the Policy Simulation Model (PSM) which uses data from the Family Resources Survey (FRS). These are estimated indicative figures.
3. The PSM models the calculation of individual taxes and income-related benefit entitlement, by deriving detailed microdata from the latest available FRS.
4. The PSM models the current policy year (2007-08) using the latest FRS data (2005-06), by uprating the FRS to represent the appropriate policy year.
5. The analysis provided assumes full take-up of income-related benefits in the current policy year (2007-08).
Specific information regarding low income for the United Kingdom is available in “Households Below Average Income 1994-95 to 2005-06”. This annual report, which is a National Statistics publication, includes the number and proportion of individuals, children, working age adults and pensioners with incomes below 50 per cent., 60 per cent. and 70 per cent of median income.
We do not present information covering 40 per cent. of median income in our “Households Below Average Income” series as it is not a sound measure of poverty. This is because households stating the lowest incomes to the Family Resources Survey may not actually have the lowest living standards. Some people who report very low incomes appear to have high spending. Hence, any statistics on numbers in this group may be misleading.
Data for number of children below various income thresholds for London over the last 10 years are shown in the following table.
Million 40 per cent. 50 per cent. 60 per cent. Time period Before housing costs After housing costs Before housing costs After housing costs Before housing costs After housing costs 1994-95 to 1996-97 0.1 0.3 0.2 0.5 0.4 0.7 1995-96 to 1997-98 0.1 0.3 0.2 0.5 0.4 0.7 1996-97 to 1998-99 0.1 0.3 0.2 0.5 0.4 0.7 1997-98 to 1999-2000 0.1 0.3 0.2 0.5 0.4 0.7 1998-99 to 2000-01 0.1 0.3 0.2 0.5 0.4 0.6 1999-2000 to 2001-02 0.1 0.3 0.2 0.5 0.4 0.6 2000-01 to 2002-03 0.1 0.3 0.2 0.5 0.4 0.6 2001-02 to 2003-04 0.1 0.3 0.2 0.5 0.4 0.6 2002-03 to 2004-05 0.1 0.3 0.2 0.5 0.4 0.6 2003-04 to 2005-06 0.1 0.3 0.2 0.5 0.4 0.6 Notes: 1. Three survey year averages are given for regional low income statistics as robust single year estimates cannot be produced because of the sample sizes for individual regions. 2. The income measures used to derive the estimates shown employ the same methodology as the Department for Work and Pensions publication “Households Below Average Income” series, which uses disposable household income, equivalised for household size and composition, as an income measure as a proxy for standard of living. 3. The figures are based on OECD equivalisation factors. 4. The preferred measure of low income is based on a threshold of 60 per cent. of the contemporary median income. This is an internationally recognised measure and is consistent with indicators that will be monitored as part of Public Service Agreement Delivery Agreement 9. 5. This response includes a lower income threshold of 40 per cent. of the contemporary median income. The data for families with an income lower than 50 per cent. of median is not considered to be accurate as an indicator of living standards. Many of these households while having very low incomes would not be considered poor, but who do genuinely have few sources of income in the short-run. These figures are not National Statistics and caution must be applied because those people stating the lowest incomes in the Family Resources Survey may not actually have the lowest living standards. 6. Figures have been presented on both a before housing cost and after housing cost basis. For before housing cost, housing costs (such as rent, water rates, mortgage interest payments, structural insurance payments and ground rent and service charges) are not deducted from income, while for after housing cost they are. 7. Numbers in the table have been presented in millions, rounded to the nearest 100,000 children.