The Department for Work and Pensions has today published annual statistics covering 2019-20 including on households below average income (HBAI) and separated families. HBAI covers a range of information, including household incomes and a range of low-income indicators for 2019-20, derived from the family resources survey of around 20,000 households.
Between 2018-19 and 2019-20, the proportion of people below the absolute low income line fell. Before housing costs, this was a decrease of one percentage point to 14% or 9.2 million people. After housing costs, it was a fall of two percentage points to 18% or 11.7 million people. There were also decreases in absolute low income after housing costs for children, pensioners, working-age people and individuals living in a household where someone is disabled. Compared to 2009-10, there were over 1.3 million fewer people in absolute low income, after housing costs: 260,000 fewer children, 890,000 working age adults and 180,000 pensioners.
In 2019-20, median household incomes grew by 4.5% after inflation, an increase of over £1,000 a year to reach an all-time high, alongside a record high employment rate. This was the strongest annual income growth since 2001-02. Incomes increased across the entire income distribution, with the poorest 20% of households seeing their real incomes increase by over 6% on average after housing costs. This growth in median income reflects the success of Government policies we have taken to help people move into work and keep more of what they earn—for example, raising the national living wage and increasing the personal tax allowance.
The statistics show increases in the proportions of households below the relative low income lines, reflecting the very strong growth in median income in 2019-20. The proportion of households below the relative low income line, before housing costs, increased by one percentage point to 18% or 11.7 million individuals, and, after housing costs, the proportion remained the same at 22% or 14.5 million individuals. There were increases in relative poverty both before and after housing costs for children, pensioners and those living in households where someone is disabled.
Rates of combined low income and material deprivation for children were lower in 2019-20 than in 2010-11 and rates of material deprivation for pensioners remained at a record low of 6%.
Today’s statistics also show that 44% of separated families did not have a child maintenance arrangement in place in 2019-20. We know that child maintenance payments have a significant impact on reducing the number of children living in low income households. For the first time, estimates relating to the income distributions of parents in separated families have been published, showing that 60,000 children move out of absolute low income before housing costs; and 120,000 after housing costs as a result of child maintenance payments from 2017-18 to 2019-20.
We have also published data on household food security from the family resources survey for the first time, to get a better understanding of the lived experience of families. This shows that 8% of households are classed as food insecure, with 4% of households in low food security and 4% in very low household food security.
Overall, these statistics reinforce that the economy entered the pandemic in a strong position, with people seeing rising incomes. The Government have built on this firm financial foundation with an unprecedented package of measures to protect livelihoods and incomes, including the coronavirus job retention scheme, the self-employment income support scheme and an extra £7.1 billion of welfare support in 2020-21. Our plan for jobs and the support provided through universal credit are helping people to raise their incomes by moving into and progressing in work.