Poverty and Income Inequality in Scotland 2022-25

3   All people

The most commonly used poverty indicator in Scotland is relative poverty after housing costs. Alongside this key indicator, we also report on other poverty measures, focusing on different aspects of poverty.

3.1     Relative poverty

A person is in relative poverty if their current household income is less than 60% of the current UK median. Relative poverty statistics fall if income growth at the lower end of the income distribution is greater than overall income growth.

Charts have been adapted this year to present the step change introduced by the move to integrated survey and administrative data (data linkage). Figure 1 shows that over the longer term the proportion of people in relative poverty after housing costs fell between the late nineties (24%) and the lowest point in this time series in 2009-12 (18%). Thereafter the poverty rate remained broadly stable up to 2017-20.

Further years of linked data are required to confirm the recent trend and care should be taken in making direct comparisons before and after the linkage break. The most recent estimate for 2022-25, based on linked data, shows that 17% of Scotland’s population (940,000 people) were living in relative poverty after housing costs and 15% (840,000 people) before housing costs.

3.2 Absolute poverty

A person is in absolute poverty if their current household income is less than 60% of the UK median in a given reference year, adjusted for inflation. Absolute poverty statistics fall if low-income households see their income rise faster than inflation.

Up until the March 2025 publication, the reference year for absolute poverty was 2010/11. However, due to the structural break introduced by the data linkage the reference year has been moved to 2024/25 and provides a more up to date position. As shown in figure 2, absolute poverty statistics have been revised back to 2021/22 using the 2024/25 base, and prior to 2021/22, the 2010/11 reference year series is maintained.

Figure 2 shows that 2010/11-based absolute poverty steadily declined from the mid-nineties up to around 2008-11, after which rates remained at similar levels for a decade. This pattern was seen for both the before and after housing costs series.

For the 2024/25 based series, in 2022-25 it is estimated that 18% of the population (1,000,000 people each year) were living in absolute poverty after housing costs in 2022-25. Before housing costs it was 17% of the population (900,000 people each year). The increase in absolute poverty rates, following the break, is expected because real incomes in the 2024/25 reference year are higher than in 2010/11. Thus the median income used to set the poverty threshold is higher. Further years of the 2024/25 based series are required to confirm a recent trend and care should be taken making direct comparisons before and after the discontinuity.