30 March 2005 - Fewer children and pensioners in poverty - Johnson
New figures released today by the Department for Work and Pensions shows more pensioners and more children lifted out of poverty during 2003/4:
- Absolute pensioner poverty is down from 2.8 million in 1997 to 900,000 today, a fall of two thirds or 1.9 million. In the last year the numbers have fallen by 100,000.
- Relative pensioner poverty (which allows for rising real average incomes, so is harder to reduce) is now down a quarter, or by 700,000, since 1997, with a 300,000 fall in the last year alone – the biggest decline since the series began.
- Absolute child poverty is now almost halved, down from 4.2 million in 1997 to 2.2 million today.
- Relative child poverty (which allows for rising real average incomes, so is harder to reduce) has fallen another 100,000 this year, and is now 700,000 lower than in 1997.
Alan Johnson Secretary of State for Work and Pensions said:
“These figures show that the £11 billion extra we are spending on pensioners is making a huge difference. Absolute poverty is down two-thirds since 1997 and relative poverty, which is tougher to reduce, is now also down by a quarter. The fall in relative poverty in 2003/4 alone exceeds 10% and is the largest single fall since the series began. The big reduction in poverty is concentrated in the second half of this tax year, when Pension Credit was in place.
“Child poverty also continues to decline, with a further 100,000 lifted out of relative poverty in 2003/04. During this year the new tax credits were introduced, and their take-up grew rapidly. Again, detailed analysis suggests that the decline is bigger in the last six months when more people were getting their credits. A big increase in Child Tax Credit rates – combined with further increases in take-up – will show up in next year’s figures, keeping us broadly on track to hit our targets, on our way to eradicating child poverty within a generation.
“So, we are making good progress both for pensioners and children – and we should shout from the rooftops about this – but I am also quite clear that there is much more to do to maintain this momentum”.
Today’s report also sheds light on overall income inequality. Before 1997 incomes of the better off raced ahead, and poorer groups were left behind, and UK income inequality rose further than that in any other major country. But since 1997 growth has been more fairly shared, with the poorer two fifths actually seeing larger proportional increases in incomes than the better off.
Notes for editors
- New Households Below Average Income figures have been released by the Department for Work and Pensioners today covering the period 1994/95 to 2003/04. Figures quoted are on a disposable income (After Housing Cost) basis.
- ‘Absolute poverty’ refers to individuals in households below 60% of the 1996/97 median; relative poverty is for those in households below 60% of the contemporary median.
- Pension Credit was introduced in October 2003 so impacts only on the pensioner poverty figures covering the last six months of the tax year. Detailed analysis of the data underlying today's figures suggests there may have been a reduction in pensioner poverty from 2.2 million to 1.9 million between the first and second half of the financial year.
- The Child Tax Credit was introduced in April 2003, but take-up built up gradually during that tax year. The data underlying today’s report captures more than a million extra families claiming tax credits at the end than the start of the year. Detailed analysis of the data underlying today's figures suggests there may have been a reduction in child poverty from 3.6 million to 3.3 million between the first and second half of the financial year.
- The increases in the Child Tax Credit rates announced in PBR 2003 came into effect in April 2004 so will have an impact in next year’s figures.
- A press notice from the Office for National Statistics can be downloaded from http://www.dwp.gov.uk/asd/hbai/hbai2004/first_release_0304.pdf (136KB)
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