Poverty: facts and figures

Last Modified: 10 Jun 2008
By: Channel 4 News

Watch Gordon Brown make his claims on poverty, and then read the real facts and figures from the team behind FactCheck.

What's the poverty line?

It's defined as being below 60 per cent of the median income.

The median income is the one in the middle. If you lined up all the households in the country in order of income, there would be as many households earning more than the median as there would be earning less.

So according to 2005-06 data, the median (net) income for a single adult is £242 a week; for a childless couple, £362 a week; for a couple with two children (aged five and fourteen) it's £554 a week, or £434 for a single parent with two kids.

The poverty line - 60 per cent of these - would be, therefore: £145 a week in the pocket of a single adult, £217 for a childless couple, £332 for a family with two children and £260 for a single parent with two children. Those with a cash income of these figures, or less, are officially defined as living in poverty.

Relative and absolute poverty

There are two ways to assess poverty: according to an absolute figure, or relative to the incomes of the rest of the population.

Absolute poverty is measured by calculating the poverty threshold in a baseline year. For the purposes of government calculations, this is 1998/99.

The same figure, adjusted for inflation, is used in subsequent years to calculate the number of people living in poverty.

Which sounds sensible, but people's incomes tend to rise faster than the rate of inflation. So by choosing a fixed baseline like this doesn't reflect how well-off people feel in comparison to the rest of society. They may be able to buy things they couldn't previously afford, but if everyone else can buy two of these things, it's debateable whether they would actually feel better off.

So we also look at relative poverty, which re-calculates the poverty line each year based on the average income at that time. If the rest of the population is getting richer, the median rises accordingly - and so the poverty threshold with it. This is the measure the government uses in its targets.

Tackling relative poverty does imply a more equal society, with the gap between rich and poor being narrowed. It doesn't necessarily follow, however. For example, the gap between the very richest and the very poorest could increase, as long as there weren't too many of them.

Which is more useful?

That's more a matter of philosophical debate than a statistical question. Relative poverty (before housing costs) is the measure most commonly used and on which the government bases its child poverty target; absolute poverty tends to show a more dramatic improvement (as the poverty line comes to be set much lower).

This doesn't stop politicians dropping the odd boast based on absolute poverty, of course.

Why all the fuss about child poverty?

"Our historic aim will be for ours to be the first generation to end child poverty, and it will take a generation. It is a 20-year mission but I believe it can be done."

So said Tony Blair nine years ago, in a speech on 18 March 1999. His pledge became one of Labour's boldest - and most scrutinised - targets.

The "generation" was later firmed up as being by 2020; interim targets were set, including to halve the number of children in "relative low-income" households between 1998-99 and 2010-11.

An interim target of reducing child poverty by a quarter by 2004-05 was missed, and last year's figures showed instead a slight rise, putting the government even further away from hitting the target.

How poor am I really?

Poverty is a relative measure and there are also targets to cut global poverty. Just to put things into perspective, a pretty common indicator of extreme poverty in the developing world is that of people living on less than $1 a day.

According to a UN report published last year, there were 980 million people living below this line worldwide in 2004, down from 1.25 billion in 1990.

The Global Rich List website doesn't used the most up-to-date of data, but is still a fun way to see how much - or how little - you earn compare to the rest of the world: Global Rich List.