Poverty in Scotland 2015/16

Statistics show the incomes of poorer households fell further behind those of middle income households in 2015/16 pushing more people into poverty.

Poverty rates have been relatively stable over the last decade with some fluctuations year on year. However in 2015/16 the median income in Scotland fell below that in the UK and, while single year changes must be interpreted with caution, rising poverty rates alongside other indicators suggests low income households - especially families with children - are falling further behind those on middle incomes.  In 2015/16 over 1 million people in Scotland were in relative poverty after they had paid their housing costs.

• In 2015/16, 17 per cent of people in Scotland were living in relative poverty, before housing costs (BHC), 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. 

Child poverty figures are more complex. Estimates for 2015/16 signal relative child poverty increased before and after housing costs, but the combined low income and material deprivation rate for children has remained steady.  This suggests that despite the indicative upward push on poverty rates there has been no overall change in the ability of low income households to afford necessities.

• 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 in 2015/16, approximately 260 thousand children. This compares to 22 per cent the previous year.
• In 2015/16, 10 per cent of children were living in combined low income BHC and material deprivation and 12 per cent of children were living in combined low income and material deprivation AHC, both unchanged from the previous year.

In-work poverty has shown a long term rising trend since 2009/10 which continues in 2015/16 with 62% of working-age adults and two thirds of children in BHC poverty living in working households.  Many of those low income households who have moved into employment are in part-time work. For working families who also receive benefit income, especially families with children, increases in earnings are balanced against reductions in benefit income, which combined with a one per cent cap on benefit up-rating means that they have fallen further behind the average Scottish income.

There was a sharp rise in income inequality in 2015/16 although future data will be required to clarify whether this is a result of annual variation in the data or a longer term trend. The top ten per cent of households saw large increases in income, mainly from employment while lower income households saw a small reduction. This has stretched the income distribution, resulting in low income households falling behind those in the middle and even further behind those at the top.