New Income And Poverty Statistics For Scotland - Initial Thoughts

24th March 2023

Arport by Emma Congreve. Emma is Deputy Director and Senior Knowledge Exchange Fellow at the Fraser of Allander Institute.

Today saw a new set of data released new set of data released on income and poverty across the UK. The full set of data and analysis for Scotland have been published by the Scottish Government here. For Scotland, this is the first set of figures we've had for a couple of years due to the impact that the pandemic had on the size of the survey sample.

This means that this is the first update since the pandemic that paints a picture for Scotland.

These statistics also give us an insight into progress towards the legislative targets relating to child poverty. More on that later.

The Scottish Government uses three-year averages to look a trends in income and poverty in Scotland. A key issue to be aware of in using this data is that, due to the missing data for 2020-21, the only three-year period that includes the impact of the pandemic is 2019-2022, which includes data only for 2019-20 and 2021-22.

Household Income

Household income refers to the money available for families after tax and transfers (i.e. benefit income). Housing costs are also deducted. Together, these figures provide us with the best picture we have of the money people in Scotland have to live on.

This data doesn't look at the impact of inflation on spending power. However, the data we have predates the large inflationary increases we have seen recently and hence we don't need to worry about inflation too much in interpreting what these statistics mean for living standards over the period in question.

So what do today's statistics tell us about average household incomes?

Chart 1 shows median income trends since 2000. In the period 2019-2022 (which is actually 2019-20 and 2020-21, so all pre-pandemic), median household income before housing costs were £511. The most recent figure is £505 a week. The government statisticians are keen to point out (and we agree) that we can't say too much about trends based on one data point. However, as Chart 1 shows, it is rare to see a fall in a household income, with the last time this was the case being the years during and following the financial crisis. However, it would not be surprising if the pandemic has had this impact given the disruption it caused.

Read the full article HERE