Poverty and Income Inequality in Scotland 2021-24

Poverty measures

The Scottish Government measures different aspects of poverty with different indicators. The most commonly used poverty indicator in Scotland for showing trends is relative poverty after housing costs. Other poverty measures in this report are absolute poverty, material deprivation, and degrees of household food security. These are included in additional charts throughout the report.

Unless otherwise stated, these statistics are based on net income and adjusted for household size. Net income is income from earnings, social security payments and other sources minus taxes. All incomes are in 2023/24 prices, so the purchasing power is comparable over time. Estimates in this publication are rounded to the nearest £1 for weekly incomes, £100 for annual incomes, 1% for proportions and ratios, and 10,000 for populations. Poverty is defined at the household level. If the household income is below the poverty threshold, all people within the household are assumed to be in poverty.

Survey data

The estimates in this publication are based on a sample survey and are therefore subject to sampling variation.

For example, the child poverty rates for Scotland in the latest period can vary within a typical uncertainty range of plus or minus six percentage points, or plus or minus 60,000 children. This means that the proportion of children in relative poverty is likely to be somewhere between 18% and 29%. And the number of children in relative poverty after housing costs is likely to be somewhere between 180,000 and 300,000 children. Poverty rates and numbers shown in this report give the central estimates only.

For some of the key estimates, you can find the ranges in the measurement uncertainty section. To show this in the poverty charts, you can also add indicative confidence intervals around the trendlines.

The latest changes in the estimated poverty rates in the Poverty and Child poverty sections of this report are not statistically significant. It is therefore better to look at longer-term trends to confirm that a change over time is real, or that differences between groups are consistent.

Three-year averages

The poverty and income estimates are shown as three-year rolling (overlapping) averages, unless stated otherwise. Taking the average over three years reduces fluctuation due to sampling variation and shows trends and differences between groups more clearly.

Some single-year estimates are also available in the associated tables.

Impact of the pandemic

The coronavirus - COVID 19 pandemic severely disrupted the data collection in 2020/21. As a result, we were unable to obtain a representative sample for Scotland in that year. This means that the periods 2018-21, 2019-22 and 2020-23 only contain data from two financial years. Therefore, some real changes that happened to incomes, such as the furlough scheme or the temporary increase of Universal Credit are only partially captured in the time series.

The latest statistics for 2021-24 revert to a 3-year average. However, although we have 3 years’ worth of data, the pooled sample is around a third less than in 2017-20 due to response rates being lower since the pandemic. Response rates are showing sign of recovery but results can still be volatile, and changes need to be interpreted with caution.

More information about the impact of the pandemic on data collection and current survey challenges is available in DWP’s HBAI Technical report.

Scottish child payment

Work has been undertaken to better reflect the level of Scottish Child Payment (SCP) in the FRS. This is a benefit available to low income families in Scotland with children aged under 16 and was introduced in 2021.

The methodology has been revised for 2023 to 2024 and uses estimated age-specific take-up rates to create more precise estimates of the contribution of SCP income to overall household income. Further details can be seen on the FRS background information pages and in the background notes in this publication.

Material deprivation

This report includes the new material deprivation measures for children and pensioners. The latest results are therefore not directly comparable to previous estimates.

The update to material deprivation measures follows the inclusion of new questions in the FRS from April 2023 to March 2024 and analysis by DWP to review the previous measures. More information on the changes to the material deprivation FRS questions can be found in the background notes and DWP’s technical report.

Scottish winter heating payment

A minor change has been made to reflect receipt of winter heating payments in Scotland which differ from the rest of the UK. Please see the background notes for more information.

Relative poverty

Absolute poverty

Food security

Food security tables are now available for a range of household types and equality characteristics in the associated tables. They show, for example, that the older the household, the more food secure it is.

Relative poverty

Absolute poverty

Material deprivation

Food security

Relative poverty

Absolute poverty

Food security

Relative poverty

Absolute poverty

Material deprivation

Food security

Age

The age analysis looks at the age of the head of the household. Poverty rates refer to the proportion of people in households by age of the household head.

Gender

In 2021-24, women and men experienced the same level of relative poverty after housing costs (19%). This can be explained because poverty is measured at a household level and means that men and women in the same household are both either in poverty or not in poverty.

However, by looking at single-adult households (with or without dependent children) it is possible to identify differences in poverty rates. For context, in 2021-24, the relative poverty rate after housing costs for single adults (working-age and pensioners) was 27%, higher than for the total adult population (19%).

Sexual orientation

Marital status

Ethnicity

Ethnicity data relates to all people in a household and is based on the ethnicity of the adult with the highest income.

Religion

Data on religion is available for adults only, so this analysis does not include children.

Disability

Income trends

Income distribution

Poverty thresholds

Most of the income estimates in this publication are based on equivalised income. This means that household income is adjusted to reflect different household sizes and compositions. When income is not equivalised, households of different sizes have different poverty thresholds. The table below shows the relative and absolute poverty thresholds, before equivalisation, for households of different sizes.

The incomes presented elsewhere in this report use the value for “Couple with no children” as the standard; incomes of all other household types are adjusted (equivalised) to reflect their different household composition. Full details of how incomes are equivalised are in the background notes.

Income sources

What does HBAI measure?

Households Below Average Income (HBAI) uses household disposable incomes, adjusted for the household size and composition, as a proxy for material living standards. More precisely, it is a proxy for the level of consumption of goods and services that people could attain given the disposable income of the household in which they live.

The unit of analysis is the individual, so the populations and percentages in the tables are numbers and percentages of individuals - both adults and children.

Data is collected during the financial year, so between April and March of the following year. Statistics are usually published in March, a year after the end of the data collection.

The living standards of an individual depend not only on their own income, but also on the income of others in the household. Consequently, the analyses are based on total household income: the equivalised income of a household is taken to represent the income level of every individual in the household. Equivalisation, a technique that allows comparison of incomes between households of different sizes and compositions, is explained in the Definitions section.

Data collection during the coronavirus pandemic

The coronavirus - COVID 19 pandemic severely disrupted the data collection in 2020/21. As a result, we were unable to obtain a representative sample for Scotland in that year. This means that the periods 2018-21, 2019-22 and 2020-23 only contain data from two financial years. Therefore, some real changes that happened to incomes, such as the furlough scheme or the temporary increase of Universal Credit are only partially captured in the time series.

The latest statistics for 2021-24 revert to a 3-year average. However, although we have 3 years’ worth of data, the pooled sample is around a third less than in 2017-20 due to response rates being lower since the pandemic. Response rates are showing sign of recovery but results can still be volatile, and changes need to be interpreted with caution.

More information about the impact of the pandemic on data collection and the data itself is available in DWP’s HBAI Technical report.

Population coverage

The Family Resources Survey is a survey of private households. This means that people in residential institutions, such as nursing homes, barracks, prisons or university halls of residence, and also homeless people are excluded from the scope of the analysis presented here. The area of Scotland north of the Caledonian Canal was included in the FRS for the first time in the 2001/02 survey year. In recent years response rates have reduced resulting in around 1,800 households in 2023/24.

For further information see the DWP Households Below Average Income publication.

Reliability of estimates

Estimates in this report are based on a sample survey and are therefore subject to sampling variation as well as other measurement error.

Confidence intervals describe measurement uncertainty that comes from using a random sample to represent a whole population. There are other sources of measurement error, which are not captured by confidence intervals. This means that confidence intervals can only represent part of the measurement uncertainty.

We use two kinds of confidence intervals, with tables and more detail available on the measurement uncertainty page. Estimates for the confidence intervals around the key figures are provided by DWP. We have also added indicative confidence intervals to all poverty charts. They are not as accurate as those calculated for the key figures, but they sufficiently reflect how sample size and variation affect measurement uncertainty.

When describing trends or differences between groups in this report, we judge whether an apparent trend or a difference is likely to be real by looking at a range of clues:

• Is the trend or difference large?
• Is it consistent over time?
• How much do previous data points fluctuate?
• How much measurement uncertainty do the confidence intervals suggest?
• Does the trend make sense based on what else we know about the economy or the groups?
• What do we know about any data issues affecting this particular data?

The Family Resources Survey publication contains information on topics such as sample design, non-response biases, weighting; item non-response, imputation and editing; accuracy of income data.

Scottish Child Payment

Work has been undertaken to better reflect the level of Scottish Child Payment (SCP) in the FRS. SCP was introduced in February 2021 for low income families with children under 6 years old and eligibility was extended to under 16-year olds from November 2022. The FRS began collecting data on Scottish Child Payment (SCP) in the 2020 to 2021 survey year. As with other benefits, the reported FRS caseload remained below official caseloads published by Social Security Scotland.To reduce the level of under-reporting, cases of SCP were imputed in eligible benefit units for the 2022 to 2023 survey year.

This methodology has been revised for 2023 to 2024 following consultation between SG and DWP analysts. The new approach uses estimated age-specific take-up rates to create more precise estimates of state support income for its use within the FRS dataset.

As usual, any derived variables used within the calculation of benefit unit and household income will include these SCP amounts paid as appropriate. These variables are used to derive the poverty statistics therefore the SCP payments will also be reflected in the 2023-24 results.

Details of the revised methodology is available in the FRS background information document published by DWP. DWP have also published comparisons between the estimated level of SCP recipients through the FRS and the administrative caseload in their methodology tables. The undercount of 26% is comparable to the level of other benefits recorded through the survey such as Universal Credit.

Material deprivation

Material deprivation is an additional way of measuring living standards and refers to the self-reported ability of individuals or households to afford goods and activities that are typical in society at a given point in time. Statistics are derived from questions on whether household members can afford items listed on the FRS questionnaire.

Material deprivation estimates for 2023-24 are based on updated measures and therefore not directly comparable to previous estimates. This section outlines the ways in which the child and pensioner measures have been updated and provides a full comparison of the estimates, before and after the update.

Combined low income and child material deprivation (Tables 7 in the one and three year excel workbooks)

A suite of questions designed to capture the material deprivation experienced by families with children has been included in the FRS since 2004-05. There was a notable change in to the material deprivation questions on the 2010-11 FRS. See Appendix 3 of the 2010-11 HBAI publication for a discussion of the implications of changing the items at that point.

Regarding the 2023-24 change for combined low income and child material deprivation, users should be aware of the following changes:

• updated material deprivation questions for children now consist of 22 questions, of which 11 are child items and 11 are household items. Previously there were 21 child material deprivation questions;

• a change in the approach to calculating the number of items has moved to a simple count approach from the previous, more complex prevalence-weighted score approach. A prevalence-weighted score gives greater weight to lacking those items that are more commonly held or where ownership is more widespread;

• a change in the approach of defining a lacked item, the full details of which are available in the DWP technical report;

• an update to the threshold at which a child is defined as being in material deprivation – for children this is now 4 or more items. Previously the equivalent was 6.

As this measure is combined with low income, the 70% of median income threshold is still used as the cut off, the same as before the update.

The table below shows a comparison of the impact of the update. Results are shown for:

• before and after housing costs;

• “2010-11 questions” and the updated “2023-24 questions”;

• the different methods of calculation (prevalence weighting and the updated simple count of items).

DWP’s technical report provides further detail on the methodology including the concepts of prevalence-weighting and defining lacked items.

DWP carried out imputation so there were records equivalent to the updated questions for all households. The answers given to the previous questions were used as the basis to impute for similar questions in the updated 2023-24 question set. Therefore, in the table below, the 329 household sample for the updated questions includes the 99 sample from the 2009-10 questions due to imputation.

Material deprivation for pensioners (Tables 8 in the one and three year excel workbooks)

A suite of questions designed to capture the material deprivation experienced by pensioner families has been included in the Family Resources Survey since May 2008 with full year data available from 2009-10. Up until 2022-23 respondents were asked whether they had access to 15 goods and services. The list of items was identified by independent academic analysis. See:

• Legard, R., Gray, M. and Blake, M. (2008), Cognitive testing: older people and the FRS material deprivation questions

• McKay, S. (2008), Measuring material deprivation among older people

For the 2023-24 survey, the review of the material deprivation questions resulted in:

• updated questions for pensioners now consisting of 19 questions, of which 8 are pensioner items and 11 are household items (compared the total of 15 questions previously). The household items are consistent across all household types.

• a change in the approach to counting the number of items to move to a simple count approach from the previous, more complex prevalence-weighted score approach;

• a change in the approach of defining a lacked item, the full details of which are available in the DWP technical report. This is a change for the pensioner material deprivation measure which previously used a wider constrained lack definition that also included some additional follow-up reasons such as restrictions due to health or disability, too much trouble or too tiring, no one to do the activity with or to help or other reasons;

• an update to the threshold at which a pensioner is defined as in material deprivation – for pensioners this is 4 or more items. This equivalent threshold before the update was also 4.

In Scotland, child material deprivation is presented in combination with a low-income threshold. However, for pensioners, the concept of material deprivation is broad and very different from low income, therefore it is appropriate to present it only as a separate measure (where 4 or more items are absent) without applying an income threshold.

The table below shows a comparison of the impact of the update. Results are shown for:

• for the “2009-10 questions” and the updated “2023-24 questions”;

• for the different methods of calculation (prevalence weighting and the updated simple count of items).

As described above, DWP carried out imputation using answers from households asked the previous questions to impute for similar questions in the updated 2023-24 question set. Therefore, in the table below, the 665 household sample for the updated questions includes the 179 sample from the 2010-11 questions due to imputation.

Heating payments

As a routine update of the devolved benefits, income for winter heating benefit has been reflected in the survey data. As the FRS questionnaire does not ask about receipt of this benefit, amounts are imputed within the dataset for those respondents eligible and already in receipt of a qualifying benefit.

Household income

The income measure used in HBAI is weekly net (disposable) equivalised household income. This comprises total income from all sources of all household members including dependants. An adjustment is made to sample cases at the top of the income distribution to correct for volatility in the highest incomes captured in the survey.

Income is adjusted for household size and composition by means of equivalence scales, which reflect the extent to which households of different size and composition require a different level of income to achieve the same standard of living. This adjusted income is referred to as equivalised income (see definition below for more information on equivalisation).

Income before housing costs (BHC) includes the following main components:

• net earnings
• profit or loss from self-employment (after income tax and National Insurance contributions)
• all UK and Scottish social security payments, including housing and council tax benefits, tax credits, and the state pension
• occupational and private pension income
• investment income
• maintenance payments
• top-up loans and parental contributions for students, educational grants and payments
• the cash value of certain forms of income in kind such as free school meals, free welfare milk and free school milk and free TV licences for the over 75s (where data is available)

Income is net of:

• income tax payments
• National Insurance contributions
• contributions to occupational, stakeholder and personal pension schemes
• council tax
• maintenance and child support payments made
• parental contributions to students living away from home

Income after housing costs (AHC) is derived by deducting a measure of housing costs from the above income measure.

Income sources

The analysis on income sources is the only analysis in this report using gross income. This analysis is based on income before taxes from employment or self-employment, social security payments, investment, occupational pensions and other income. In some cases, income from self-employment was negative in a year, for example, when someone in self-employment made a loss. In these cases, total income from earnings was set to zero. Negative investment income was also set to zero.

Housing costs

Housing costs include the following: rent (gross of housing benefit); water rates; mortgage interest payments; structural insurance premiums; ground rent and service charges.

Before Housing Costs (BHC) measures allow an assessment of the relative standard of living of those individuals who were actually benefiting from a better quality of housing by paying more for better accommodation, and income growth over time incorporates improvements in living standards where higher costs reflected improvements in the quality of housing.

After Housing Costs (AHC) measures allow an assessment of living standards of individuals whose housing costs are high relative to the quality of their accommodation. Income growth over time may also overstate improvements in living standards for low-income groups, as a rise in Housing Benefit to offset higher rents (for a given quality of accommodation) would be counted as an income rise.

Therefore, this publication presents analyses on two bases: before housing costs (BHC) and after housing costs (AHC).

Real prices

Unless otherwise stated, all figures relating to income are in 2023/24 prices. Values from previous years are uprated to account for inflation using a variant of the Consumer Price Index (CPI). This follows a change in methodology for 2014/15. Prior to this the Retail Price Index (RPI) was used.

Full details can be found at this link: Methodological changes to poverty statistics (pdf)

Equivalisation

Equivalisation is the process by which household income is adjusted to take into account variations in the size and composition of the households in which individuals live. This reflects that in order to enjoy a comparable standard of living, a household of, for example, three adults will need a higher income than a single person living alone. The process of adjusting income in this way is known as equivalisation and is needed in order to make sensible income comparisons between households.

Equivalence scales conventionally take an adult couple without children as the reference point, with an equivalence value of one. The process then increases relatively the income of single person households (since their incomes are divided by a value of less than one) and reduces relatively the incomes of households with three or more persons, which have an equivalence value of greater than one.

Consider a single person, a couple with no children, and a couple with two children aged fourteen and ten, all having unadjusted weekly household incomes of £200 (Before Housing Costs). The process of equivalisation, as conducted in HBAI, gives an equivalised income of £299 to the single person, £200 to the couple with no children, but only £131 to the couple with children.

The equivalence scales used here are the modified OECD scales. Two separate scales are used, one for income Before Housing Costs (BHC) and the companion scale for income After Housing Costs (AHC).

The construction of household equivalence values from these scales is quite straightforward. For example, the BHC equivalence value for a household containing a couple with a fourteen year old and a ten year old child together with one other adult would be 1.86 from the sum of the scale values:

0.67 + 0.33 + 0.33 + 0.33 + 0.20 = 1.86

This is made up of 0.67 for the first adult, 0.33 for their spouse, the other adult and the fourteen year old child and 0.20 for the ten year old child. The total income for the household would then be divided by 1.86 in order to arrive at the measure of equivalised household income used in HBAI analysis.

Further information on equivalisation can be found in the methodology report on the Scottish Government website.

Poverty measurement

Individuals are defined as being in poverty if their equivalised net disposable household income is below the poverty line. Different poverty measures have different poverty lines, for example:

• Relative poverty is the most commonly used poverty measure. The relative poverty line is 60% of the UK median income in the same year. People are in relative poverty if they live in a household whose equivalised income is below this amount. Relative poverty statistics fall if income growth at the lower end of the income distribution is greater than overall income growth.

• The absolute poverty line is 60% of the inflation-adjusted UK median income in 2010/11. People are in absolute poverty if they live in a household whose equivalised income is below this amount. Absolute poverty statistics fall if low income households are seeing their incomes rise faster than inflation.

• The severe poverty line is 50% of the UK median income in the same year. People are in severe poverty if they live in a household whose equivalised income is below this amount. Severe poverty statistics fall if income growth at the lowest end of the income distribution is greater than overall income growth.

The latest poverty lines can be found in the Poverty thresholds section.

Food security

The Family Resources Survey collected household food security information for the first time in 2019/20. The questions were adopted from the United States Department of Agriculture’s Adult Food Security Survey Module, using a 30-day reference period, and using the same food security levels (“high”, “marginal”, “low”, “very low”).

The food security analysis in this report excludes shared households, such as a house shared by a group of professionals. These respondents may not have insight into the food security status of others in their household and may not regularly share financial information.

Previously, data on household food insecurity in Scotland had been collected by the Scottish Health Survey. The measure in this report is different from the one from the Scottish Health Survey, because it is based on different questions, which are asked in a different context, using a different sample of the population, and refer to a different period of time. Therefore, these measures cannot be directly compared.

Dependent children

In this publication, ‘child’ refers to a dependent child. A dependent child is a person aged 0-15, or a person aged 16-19 and: not married nor in a Civil Partnership nor living with a partner, and living with their parents, and in full-time non-advanced education or in unwaged government training.

Single parents

In this publication, ‘single parents’ and ‘single mothers’ refer to a situation where the primary residence of a dependent child is in a family with one adult. Data for single fathers is not available due to small sample sizes. This family type does not necessarily imply that the child only has contact with one parent. The child may have non-resident parents who contribute to their welfare. Income transfers from a non-resident parent to the resident parent (such as Child Maintenance payments) are included in the household income.

It is also possible that a single parent family shares a household with another family, for example the child’s grandparents. Income from all household members contribute to the household income and determine whether the household is in poverty.

Household head

The head of the household is the adult with the highest income. If two adults have the same income, it is the older person.

Shared households

A shared household is a household where the household reference person is unclear or arbitrary, such as a group of students, unrelated adults etc., where the household is being shared on an equal basis. Households where adult children are living with their parents or where there are lodgers, but the owner lives in the household, are both not considered shared households for the purposes of this definition.

Tables and further analysis

This publication contains the headline poverty, child poverty and household income statistics. Associated tables are available for download and contain:

• all estimates used in the charts

• additional relative and severe poverty and child poverty estimates including numbers, rates and compositions of those in poverty disaggregated by a wide range of personal and household characteristics such as:

  • housing tenure
  • family type
  • economic status
  • urban / rural area
  • Scottish Index of Multiple Deprivation decile
  • number of children in household
  • child age

Additional analysis themes are based on the needs of users. If you have any suggestions for future analysis please contact us.

Local poverty analysis

The main poverty data source, the Family Resources Survey, provides information at national level only. Alternative data sources are not directly comparable with the official poverty estimates presented in this report.

More information on local poverty and income analysis from alternative data sources is available.

Persistent poverty

New figures on persistent poverty were published on 27th March 2025.

Persistent poverty identifies the number of individuals living in relative poverty for 3 or more of the last 4 years. It therefore identifies people who have been living in poverty for a significant period of time, the rationale being that this is more damaging than brief periods spent with a low income, with the impacts affecting an individual through their lifetime.

One of the four statutory child poverty target measures is persistent child poverty after housing costs.

These figures come from the Understanding Society survey which tracks individuals over time. The persistent poverty figures are not directly comparable to the figures in this publication as they use different income definitions and cover different time periods, but they provide useful additional information on poverty in Scotland.

Scottish Government websites

Further analysis based on the FRS and HBAI datasets is published by the Scottish Government throughout the year on the Scottish Government’s poverty and child poverty statistics webpages. Previous poverty reports and other Scottish Government statistics are available here:

• Poverty and income inequality analysis
• Confidence limits surrounding Scotland’s key poverty estimates
• Child poverty analysis
• Wealth analysis
• Scottish Index of Multiple Deprivation
• Further information on all Scottish Government statistics
• Scottish Government approach to tackling poverty

Access source data

The data collected for this report cannot be made available by Scottish Government for further analysis, as the Scottish Government is not the data controller. However, the data controller (the UK Department for Work and Pensions) are making the data available through the UK Data Service.

Contact

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