Poverty and Income Inequality in Scotland 2015/16

Background Notes and Methodology

In this publication all statistics are based on net income. That is, income after taxes and including benefits. Income is calculated at the household level, and reflects the income available to the household after taxes (including council tax) are paid and all benefits and tax credits have been received. Unless otherwise stated, incomes for previous years are in 2015/16 prices (real prices).

All figures in this publication are rounded to the nearest 10 thousand individuals or whole percentage point. Percentage change and percentage point change are calculated prior to rounding. In some cases, calculations based on the unrounded figures do not match those based on the rounded ones meaning that changes reported in the text of the report do not always match with the rounded figures in the tables and charts.

Poverty is measured at the household level. If household income is below the poverty threshold, all people within the household are in poverty. This is based on the assumption that income is shared equally across all members of the household, and they have the same standard of living.

The estimates presented in this publication are based on a sample survey and are therefore subject to sampling error. Confidence intervals are a measure of sampling error. A 95 per cent confidence interval for an estimate is the range that contains the 'true' figure on average 19 times out of 20 if sampling error were the only source of errors.

For example, when looking at poverty rates for all individuals the true value is likely to be within a range of around +/- 3 percentage points around the central estimate presented in this report, whilst a change of around 4 percentage points or more is generally required to represent a statistically significant change over time.

New methodology has been established this year to improve the calculation of confidence limits. More information can be found here: https://www.gov.uk/government/publications/changes-to-dwp-households-and-pensioners-incomes-statistics-201516-statistical-notice

Unless specifically stated, annual changes in the numbers and percentages of people in poverty presented in the body of this report are not statistically significant. Caution should be exercised when looking at year on year comparisons, with longer term trends often giving a clearer picture. More information can be found here:

Scottish Government - Income and Poverty Statistics - Methodology

Changes to statistics 2015/16

This publication includes a change to the statistics compared with previous publications:

Pensioners are defined as all those adults above state pension age. Working age adults are defined as all adults up to the state pension age. Between April 2010 and March 2016 the state pension age for women increased to 63 and it will increase further to 65 by November 2018. At this point the state pension age for men and women will be the same. The changes do not affect the state pension age for men, which remains at 65. Therefore, as with the previous five reports, the age groups covered by the pensioner poverty analysis will change for the 2015/16 report. The pensioner material deprivation statistics will continue to be based on pensioners aged 65 and over.