A Scottish Government Official Statistics publication

Published on 31 March 2022

This is the latest release.

This publication presents estimates of the proportion of people, children, working-age adults and pensioners living in persistent poverty in Scotland and in the other countries in the UK. The estimates are used to monitor progress in reducing poverty.

The latest persistent poverty estimates relate to the period between January 2016 and December 2020. The first UK-wide lockdown due to the coronavirus (COVID-19) pandemic began in March 2020. The pandemic had a small impact on data collection, see the Data source section for more information.

Key points

  • Between 2016 and 2020, 10% of people in Scotland were in persistent poverty after housing costs. Persistent poverty rates were similar for children (10%), working-age adults (10%) and pensioners (11%).

  • Persistent child poverty saw a relatively large drop compared to previous estimates, and not all of this decrease is likely to be real. Persistent poverty estimates do tend to fluctuate. They also get revised when households re-enter the longitudinal sample and data gaps can be filled. However, some of the decrease is plausible in part due to increased financial support during the pandemic for some lower-income households. At the same time, reduced earnings and job losses may have resulted in a lower median income. This may have led to a fall in the poverty line, and thereby a drop in the relative poverty rate.

  • Not everyone in poverty is in persistent poverty: More than a third of people in poverty move out of poverty each year. At the same time, a similar number of people who were not in poverty previously newly enter poverty each year.

What you need to know

Poverty can be measured in a number of different ways, each of which can tell us something different about poverty. One of the most common measures is relative (income) poverty which identifies people living in households with an equivalised income below 60% of the UK median household income. It therefore measures whether those in the lowest income households are keeping pace with the growth of incomes in the economy as a whole. Statistics on relative poverty in Scotland can be found in the Poverty and Income Inequality in Scotland report.

The statistics in this report provide information on persistent poverty in Scotland. Persistent poverty identifies individuals who live in relative poverty for three or more of the last four years. It therefore identifies people who have been living in poverty for a significant period of time, which is more damaging than brief periods spent with a low income. The impacts can affect an individual throughout their lifetime.

The estimates in this publication are derived from the Understanding Society survey. Understanding Society is a UK-wide longitudinal survey that captures information about people’s social and economic circumstances, attitudes, behaviours and health. Being longitudinal, the same individuals are interviewed each year allowing identification of those who have been in poverty over a number of years.

Some estimates from previous years have been improved and will therefore differ between publications. The latest publication provides the most accurate estimates.

This publication presents persistent poverty estimates for seven overlapping periods from 2010-2014 to 2016-2020. It now also includes poverty entry and exit rates.

The statistics presented below are subject to a degree of uncertainty. This means that implied changes over the years and between countries may not be statistically significant and instead be within a given error range. More information can be found in the Data source section.

Persistent poverty

Someone is in persistent poverty if they have been in poverty for three or more of the last four years. This measure is important because the longer someone is in poverty, the more it impacts on their health, well-being, and overall life chances.

Poverty estimates in this publication are derived by looking at household income before housing costs are paid for (BHC) and after housing costs are paid for (AHC). In Scotland, after-housing-costs poverty indicators are more commonly used.

All individuals

  • Between 2016 and 2020, 10% of people were in persistent poverty after housing costs, broadly similar to the previous period (2015-2019).

Figure 1: Proportion of people in persistent poverty, Scotland
Table 1: Proportion of people in persistent poverty, Scotland
Source: Understanding Society Survey
Period After housing costs Before housing costs Sample
2010-2014 10% 8% 3,943
2011-2015 10% 7% 3,392
2012-2016 11% 8% 3,037
2013-2017 11% 8% 2,765
2014-2018 12% 9% 2,516
2015-2019 12% 8% 2,355
2016-2020 10% 7% 2,128

Children

  • 10% of children were in persistent poverty after housing costs in 2016-2020, compared to 15% in the previous period.
  • This represents a relatively large drop compared to previous estimates, and not all of this decrease is likely to be real. Persistent poverty estimates do tend to fluctuate. They also get revised when households re-enter the longitudinal sample and data gaps can be filled. However, some of the decrease is plausible in part due to increased financial support during the pandemic for some lower-income households. At the same time, reduced earnings and job losses may have resulted in a lower median income. This may have led to a fall in the poverty line, and thereby a drop in the relative poverty rate.

Figure 2: Proportion of children in persistent poverty, Scotland
Table 2: Proportion of children in persistent poverty, Scotland
Source: Understanding Society Survey
Period After housing costs Before housing costs Sample
2010-2014 14% 10% 973
2011-2015 14% 8% 792
2012-2016 13% 9% 687
2013-2017 16% 9% 616
2014-2018 14% 9% 528
2015-2019 15% 9% 474
2016-2020 10% 6% 407

Working-age adults

  • Between 2016 and 2020, 10% of working-age adults were in persistent poverty after housing costs, similar to the previous period.

Figure 3: Proportion of working-age adults in persistent poverty, Scotland
Table 3: Proportion of working-age adults in persistent poverty, Scotland
Source: Understanding Society Survey
Period After housing costs Before housing costs Sample
2010-2014 9% 6% 2,175
2011-2015 9% 6% 1,876
2012-2016 9% 7% 1,667
2013-2017 10% 6% 1,495
2014-2018 11% 7% 1,367
2015-2019 11% 7% 1,290
2016-2020 10% 7% 1,172

Pensioners

  • Between 2016 and 2020, 11% of pensioners were in persistent poverty after housing costs, unchanged from the previous period.

Figure 4: Proportion of pensioners in persistent poverty, Scotland
Table 4: Proportion of pensioners in persistent poverty, Scotland
Source: Understanding Society Survey
Period After housing costs Before housing costs Sample
2010-2014 8% 11% 795
2011-2015 9% 11% 724
2012-2016 11% 10% 683
2013-2017 10% 10% 654
2014-2018 12% 13% 621
2015-2019 11% 11% 591
2016-2020 11% 10% 549

Poverty exit and entry

People who are in persistent poverty stay below the poverty line for several years. But many people are in poverty only temporarily. More than a third of people in poverty move above the poverty line each year, exiting poverty. And a similar number of people who were not in poverty previously fall below the poverty line each year, newly entering poverty. Note that the share of those entering poverty is quite small, as it is a share of everyone previously not in poverty.

The diagram below shows an example of the flows of individuals in and out of poverty each year. It uses the latest after-housing-costs estimates.

Diagram: poverty entry and exit

Poverty exit and entry data for Scotland is only available for all people, and not for individual age groups. However, the DWP Income Dynamics report includes estimates for children, working-age adults and pensioners in the UK overall. It also analyses what events are linked to poverty entry and exit, for example a change in earnings, or a change in household composition.

Exiting poverty

  • Between 2016 and 2020, an average of 36% of people per year who had been in poverty (after housing costs) in the previous year exited poverty.

For an exit to occur, the individual must be in a household whose income is at least 10% above the poverty threshold, while in the previous wave they were in a household whose income was below the poverty threshold.

Table 5: Proportion of people exiting relative poverty, Scotland
Source: Understanding Society Survey
Period After housing costs (AHC) Before housing costs (BHC) Sample AHC Sample BHC
2010-2014 34% 37% 2,046 1,809
2011-2015 34% 39% 1,709 1,496
2012-2016 35% 39% 1,491 1,309
2013-2017 36% 38% 1,334 1,198
2014-2018 35% 39% 1,294 1,153
2015-2019 36% 40% 1,203 1,037
2016-2020 36% 40% 1,100 946

Entering poverty

  • Between 2016 and 2020, an average of 7% of people per year who hadn’t been in poverty (after housing costs) in the previous year entered poverty.

For an entry to occur, the individual must be in a household whose income is at least 10 per cent below the poverty threshold, while in the previous wave they were in a household whose income was above the poverty threshold.

Table 6: Proportion of people entering relative poverty, Scotland
Source: Understanding Society Survey
Period After housing costs (AHC) Before housing costs (BHC) Sample AHC Sample BHC
2010-2014 5% 4% 11,426 11,663
2011-2015 6% 5% 10,129 10,342
2012-2016 6% 5% 9,010 9,192
2013-2017 6% 6% 8,032 8,168
2014-2018 6% 6% 7,254 7,395
2015-2019 7% 6% 6,684 6,850
2016-2020 7% 7% 6,092 6,246

Data source

This section provides key information on the data source and methodology used to produce persistent poverty statistics.

The estimates in this publication are derived from the Understanding Society survey. Understanding Society is a large scale longitudinal survey that captures information about people’s social and economic circumstances, attitudes, behaviours and health. Being longitudinal, the same individuals are interviewed each year allowing identification of those who have been in poverty over a number of years rather than just at a single point in time.

The Understanding Society survey has longitudinal information about over 2,100 individuals in Scotland in 2019-2020. The survey is conducted by the University of Essex, and persistent poverty estimates are calculated by the Department of Work and Pensions (DWP) for the annual Income Dynamics publication. Detailed information on the method used to calculate persistent poverty estimates can be found on the UK government webpages.

Surveys gather information from a sample rather than from the whole population. Results from sample surveys are always estimates, not precise figures. This means that they are subject to a margin of error which can affect how changes in the numbers should be interpreted, especially in the short-term. Year-on-year movements should be treated with caution. We are unable to calculate sampling uncertainties for these statistics, but please note that small changes are unlikely to be statistically significant.

Other sources

Poverty estimates presented in the Poverty and Income Inequality in Scotland report come from a different source – DWP’s Households Below Average Income dataset which is produced from the Family Resources Survey (FRS). This is the best source of household income data available in the UK. However, it does not track individuals or households over time and so cannot be used to calculate persistent poverty rates.

The FRS and Understanding Society use different income definitions and cover different time periods, and so figures which come from the two surveys are not comparable with each other. It should also be noted that an individual can be in persistent poverty without being in relative poverty in the most recent year (if they were in relative poverty in the three previous years), and so those in persistent poverty are not simply a sub-group of those in relative poverty.

Time periods

This publication presents persistent poverty rates for seven overlapping periods, each consisting of four two-year periods (waves):

  • 2010-2014: Jan 2010 - Dec 2011 (Wave 2) to Jan 2013 - Dec 2014 (Wave 5)
  • 2011-2015: Jan 2011 - Dec 2012 (Wave 3) to Jan 2014 - Dec 2015 (Wave 6)
  • 2012-2016: Jan 2012 - Dec 2013 (Wave 4) to Jan 2015 - Dec 2016 (Wave 7)
  • 2013-2017: Jan 2013 - Dec 2014 (Wave 5) to Jan 2016 - Dec 2017 (Wave 8)
  • 2014-2018: Jan 2014 - Dec 2015 (Wave 6) to Jan 2017 - Dec 2018 (Wave 9)
  • 2015-2019: Jan 2015 - Dec 2016 (Wave 7) to Jan 2018 - Dec 2019 (Wave 10)
  • 2016-2020: Jan 2016 - Dec 2017 (Wave 8) to Jan 2019 - Dec 2020 (Wave 11)

Persistent poverty statistics are based on tracking an individual over a four-year period. Each set of results are therefore based on four waves of the Understanding Society survey. This publication presents persistent poverty statistics based on waves 2-5, waves 3-6, waves 4-7, waves 5-8, waves 6-9, waves 7-10, and waves 8-11. Each wave of interviews is conducted over a two-year period, and each individual is interviewed once every year.

An individual is in persistent poverty if they are in relative poverty for at least three years in any four-year period. This means that the same individual can be in persistent poverty in all, any or none of the time periods covered in this publication.

There are known issues with the income information in the first Understanding Society wave covering 2009-2010. See Paul Fisher’s paper Does repeated measurement improve income data quality? (ISER Working Paper Series, 2016-11) for details of why income data on the first wave of Understanding Society are not comparable with subsequent waves and are likely to be of lower quality. The first wave has therefore been excluded from any analysis presented in this publication.

Population coverage

Understanding Society is a survey of private households (although it does collect information from households about their children if a child has moved into an institution). This means that people who were in residential institutions, such as nursing homes, barracks, prisons or university halls of residence at the start of the survey are excluded from the scope of the analysis presented here.

Reliability of estimates

The figures are estimates based on sample surveys and are therefore subject to sampling variation. Caution should be exercised in the interpretation of small year-on-year fluctuations.

As with most longitudinal surveys, attrition reduces the Understanding Society sample size over time. As well as attrition reducing the sample size, we have missing data for many of the variables we are using in the analysis. We exclude individuals with missing data from relevant analysis, but include individuals whenever we can. Weights have been applied which adjust for unequal selection probabilities, differential non-response, and potential sampling error.

Some estimates from previous years have been improved and will therefore differ between publications. The latest publication provides the most accurate estimates.

COVID-19 impact

The COVID-19 pandemic and subsequent policy announcements resulted in several changes to Understanding Society Wave 11 fieldwork, data collection, and processing. These are detailed in the Background information and methodology section of the ONS report. Key points to note are:

  • Wave 11 fieldwork was conducted from January 2019 to December 2020. The first UK-wide lockdown began in March 2020.
  • Understanding Society moved to a web-first approach, with telephone interviews used as follow-up. While response rates held up well overall, the shift in mode was associated with lower response rates for some groups. Weights have been adjusted accordingly.
  • Changes were made to the Understanding Society questionnaire at the end of July 2020 to capture support available to employees and the self-employed via the Coronavirus Job Retention Scheme (CJRS or ‘furlough’), and the Self-Employment Income Support Scheme (SEISS) respectively.
  • No obvious changes in rates of persistent poverty have been observed (as we might expect for a four-year measure), nor in rates of poverty entry and exit.
  • It is important to note that for various reasons, not least fieldwork timings and gaps in data mentioned above, that attributing any observed changes to the pandemic is beyond the scope of these statistics.

Age groups

Whether an individual is counted as a child, working-age adult or pensioner is determined by their age during the first survey period. So, for example, an individual aged 15 in 2011 and aged 19 in 2015 will be counted as a child for the 2011-15 period.

Definitions

Measures of income

The income used to determine persistent poverty in this publication includes:

  • Labour income – usual pay and self-employment earnings. Includes income from second jobs.
  • Miscellaneous income – educational grants, payments from family members and any other regular payment
  • Private benefit income – includes trade union/friendly society payments, maintenance or alimony and sickness or accident insurance
  • Investment income – private pensions/annuities, rents received, income from savings and investments
  • Pension income – occupational pensions income
  • State support – tax credits and all state benefits including State Pension

Income is net of the following items:

  • income tax payments;
  • National Insurance contributions;
  • domestic rates / council tax;

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

Equivalisation

Equivalisation is the process by which household income is adjusted to make it comparable across households of different size and composition. This reflects the fact that a bigger household requires more money than a smaller one to achieve the same standard of living. Further information on equivalisation can be found on the Scottish Government poverty methodology webpages

Housing costs

This publication presents analyses on two bases: before housing costs (BHC) and after housing costs (AHC). This is to take into account variations in 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.

More information

Further analysis

The headline poverty and income inequality statistics can be found in the latest Poverty and Income Inequality in Scotland report. Further analysis published throughout the year are available on the Scottish Government poverty analysis website

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

UK Government websites

Previous reports

Previous Persistent Poverty in Scotland reports are available:

Official Statistics

Official and National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. Both undergo regular quality assurance reviews to ensure that they meet customer needs and are produced free from any political interference.

Access source data

The data collected for this statistical bulletin cannot be made available by Scottish Government for further analysis, as the Scottish Government is not the data controller. However, the data controller (the University of Essex, Institute for Social and Economic Research) are making the data available through the UK Data Service.