Poverty and Income Inequality in Scotland 2015/16

Key points

Statistics in this report are taken from the Family Resources Survey. This survey collects detailed information about household income and has a large Scottish sample (2,700 households in 2015/16) making it the best source of information on household income and poverty in Scotland. As is true for all statistics based on survey data the figures are subject to a degree of error.

Given this, particular care should be taken when interpreting single year changes within this report. Where possible we have used other data sources to help understand why incomes may have changed over the year and whether this is indicative of a trend. In general, looking at longer term trends in income offers a better indicator of significant change. Further guidance on how to use and interpret these statistics is provided in the Background Note and Methodology section.

All individuals:

• 17 per cent of people in Scotland were living in relative poverty before housing costs ( BHC) in 2015/16, approximately 880 thousand people. This compares to 15 per cent in 2014/15.
• After housing costs ( AHC), 20 per cent of people in Scotland were living in relative poverty in 2015/16 representing 1.05 million people. This compares to 18 per cent in 2014/15.
• The rates of relative poverty both BHC and AHC have fluctuated over recent years making it difficult to establish the underlying trend.

Child poverty:

• 19 per cent of children in Scotland, approximately 190 thousand, were living in relative poverty BHC in 2015/16. This compares to 17 per cent the previous year.
• After housing costs, 26 per cent of children in Scotland were living in relative poverty, approximately 260 thousand children. This compares to 22 per cent the previous year.
• Relative child poverty both BHC and AHC has fluctuated in recent years following a long term decrease between 1998/99 and 2011/12.

Children in combined low income and material deprivation:

• In 2015/16, 10 per cent of children were living in combined low income BHC and material deprivation, unchanged from the previous year. In 2015/16, 100 thousand children were living in material deprivation.
• After housing costs, 12 per cent of children were living in combined low income and material deprivation, unchanged from the previous year. In 2015/16, 110 thousand children were living in material deprivation.

Working age adult poverty:

• 16 per cent of working age adults in Scotland were living in relative poverty BHC in 2015/16, this equates to 520 thousand working age adults. This compares to 15 per cent in 2014/15
• After housing costs, 20 per cent of working age adults (650 thousand) in Scotland were living in relative poverty. This compares to 19 per cent in the previous year.

Pensioner poverty:

• 16 per cent of pensioners in Scotland were living in relative poverty BHC in 2015/16, approximately 170,000 pensioners. This compares to 15 per cent the previous year.
• After housing costs, 13 per cent of pensioners in Scotland (around 140 thousand) were living in relative poverty. This compares to 12 per cent the previous year.

In-work poverty:

• In 2015/16, 62 per cent of working age adults in poverty BHC were living in working households, as were 66 per cent of children in poverty.
• After housing costs 64 per cent of working age adults in poverty were living in working households, as were 70 per cent of children.
• While employment remains the best route out of poverty, it is not always a protection against poverty. Increases in in-work poverty in recent years reflect the move into employment and reductions in the number of workless households in Scotland. However many low income households have moved into part-time employment meaning households remain in poverty.

Income Inequality:

• Median income in Scotland in 2015/16 was £24,400, equivalent to £468 per week. Median income in Scotland decreased in 2015/16 by £600, equivalent to £11 per week.
• Income inequality The top 10 per cent of the population had 38 per cent more income in 2015/16 than the bottom 40 per cent combined. This compares to 15 per cent more income in 2014/15.