More information for journalists and policy-makers about new research in child poverty, published 19 May 2021, from the Centre for Research in Social Policy, Loughborough University and commissioned by the End Child Poverty coalition:

Read the full Local indicators of child poverty after housing costs, 2019/20 research report

FAQs on new child poverty research

These FAQs explain the methodology, data sources and terms used in the Local indicators of child poverty after housing costs, 2019/20 research commissioned from the Centre for Research in Social Policy, Loughborough University, by the End Child Poverty coalition. This research was published in May 2021.

What does this new child poverty research cover?

This research provides the latest update of child poverty indicators, after housing costs, by locality. Analysis began in 2014/15 and the latest data covers the period up to the end of the financial year 2019/20. This means that these figures take no account of the effect of the Covid-19 pandemic.

Which sources of information does this report draw on?

The data in the report is based on calculations that build on the Department for Work and Pensions (DWP) and HMRC Children in Low Income Families dataset, published in March 2021. This DWP dataset estimates the percentage of children living in households with below 60% median income in each local area. These figures draw directly from tax and benefit records, making them more reliable than local estimates used in previous years. Unlike surveys, they cover the whole population, not just a sample, and can therefore be considered at the very local level.

The DWP has produced Before Housing Cost child poverty data that tracked changes in child poverty across Britain, at ward, constituency and local authority level, in working and non-working families from 2014/15–2018/19. The DWP data was published in this format for the first time in March 2020, alongside their annual publication of Household Below Average Income data. In March 2021, the DWP updated the data to cover the 2019/20 financial year. While the previous set of DWP/HMRC data covered Great Britain only, the latest data now includes the whole of the UK.

The research uses this DWP data alongside housing cost data from the Valuation Office Agency and income data from the Understanding Society survey to compile an After Housing Cost set of data.

What is the significance of ‘After Housing Costs’ data?

‘After Housing Costs’ shows the income available to a household once rent, water rates, mortgage interest payments, buildings insurance payments, ground rent and service charges are paid.

This enables a more accurate comparison of what households across the UK have available to spend on food, utilities, clothing and leisure, than looking at income alone, given the disparity of rents in different parts of the UK.

By contrast, a ‘Before Housing Costs’ model takes no account of the fact that, comparing incomes for households in different parts of the country where housing costs vary, does not produce a like-for-like comparison of disposable incomes. As a result, Before Housing Costs figures greatly understate the impact of low income in areas with high housing costs, such as London.

What data did the DWP use to compile Before Housing Cost child poverty data?

The local child poverty estimates compiled by DWP/HMRC are based on family income data.

What does the DWP mean by ‘family’ rather than household?

A ‘family’ is defined as a single person or couple plus any dependent children.

This is not the same as a ‘household’, which also includes people living together and sharing some costs and/or living space, who are not in the same family.

What has the DWP included when defining family income?

In this data, family income is considered using tax, tax credit and benefit data.

What is the definition of a child for the purposes of this data?

Unlike other child poverty data, which covers children up to the end of secondary school, these estimates are only for children under the age of 16. This is because in order to derive percentage rates, population data by age (mid-year estimates) have been used.

Conventionally, a ‘child’ over the age of 16 is one who is still in full-time secondary education, so not all 16-19 year olds are considered. The previous means of identifying the child population, Child Benefit, is no longer usable because the exclusion of some well-off families from eligibility for Child Benefit has made it an incomplete count.

What is the measure of poverty used in this data?

A child is deemed to be growing up in poverty if they live in a household whose income is 60% below the median income.

How much is 60% of median income?

These are calculations of 60% median income (the poverty line) for 2018/19 for types of families, before housing costs. A child is said to be growing up in poverty if their family income is below this poverty line.

• For a family of one adult and one child, 60% of median income, after housing costs in 2019/20 was £223 week
• For a family of one adult and two children, £280 week
• For a family of two adults and one child, £343 week
• For a family of two adults and two children, £400 week

Is this data a measure of absolute or relative poverty?

This data is a measure of relative poverty.

What is the difference between absolute and relative poverty?

The calculation of ‘absolute poverty’ is a measurement of levels of poverty in comparison with median income at a set time in the past. Current absolute poverty measures compare income today with 60% of median income in 2010, uprated by inflation. In other words, they track whether current incomes fall below the poverty level in 2010. As general living standards increase over time, we would expect absolute poverty to fall.

The term ‘absolute’ can be misleading as it wrongly conjures up images of destitution, or not being able to afford basic material essentials such as food, clothing and shelter. Instead, the ‘absolute’ measure used by the government is based on relative income at a fixed point in time.

‘Relative poverty’ can be a more useful measure as it compares a household’s income with the current incomes of other households within the UK. So, rises in relative poverty show that more households are falling below the UK average household income and are not able to meet the financial costs of a basic standard of living. Relative poverty measures give a more accurate picture of what life is like now. In other words, even if your weekly income has not gone down since 2010, it may no longer meet today’s living costs.