Individual income variables

This section summarises the individual or personal income derived variables. Individual income estimates are included in the individual level data files, w_indresp.

Individual Income variables

Total estimated net monthly income is included in the variable w_fimnnet_dv where “net” refers to net of taxes on earnings and national insurance contributions. It is constructed as the sum of the six income components described below. Gross monthly income, w_fimngrs_dv, is also estimated from the individual income components described below except that the earnings components are gross, that is, before taxes and National Insurance contributions are deducted and tax is deducted from non-pay income (rental income), which is assumed to be reported gross. The associated imputation flag for both variables is w_fimngrs_if.

The individual level data files contain estimates of the six components of individual net income. These are as follows:

Component 1: Labour income (w_fimnlabnet_dv)

This is the sum of three earnings components: net usual pay (w_paynu_dv); net self-employment income (w_seearnnet_dv); net pay in second job (w_j2paynet_dv).

During the COVID-19 pandemic Government support for employees (furlough) and self-employees (Self-employment Income Support Scheme (SEISS)) are included in the respective pay components. Further details are included in the document Understanding Society changes to the main study due to the COVID-19 pandemic.

Component 2: Miscellaneous income (w_fimnmisc_dv)

This includes receipts reported in the income data file where w_ficode equals [24] “educational grant (not student loan or tuition fee loan)”, [27] “payments from a family member not living here”, or [38] “any other regular payment (not asked in Wave 1)”.

Component 3: private benefit income (w_fimnprben_dv)

This includes receipts reported in the income data file where w_ficode equals [25] “trade union / friendly society payment”, [26] “maintenance or alimony”, or [35] “sickness and accident insurance”. This is assumed to be reported net of tax, [42] “Student Loan and/or Tuition Fee Loan”.  This is assumed to be reported net of tax.

Component 4: investment income (w_fimninvnet_dv)

This includes receipts reported in income record where w_ficode equals [4] “a private pension / annuity”, [28] “rent from boarders or lodgers (not family members) living here”, or [29] “rent from any other property”. To this is added the monthly income from savings and investments, estimated as the annual income from savings and investments (w_fiyrinvinc_dv), divided by 12.  All these sources are assumed to be reported net except for rent from other property which is assumed reported gross, and a tax liability is deducted.

Component 5: pension income (w_fimnpen_dv)

This includes receipts reported in the income data file where w_ficode equals [2] “a pension from a previous employer”, or [3] “a pension from a spouse’s previous employer”.  This is assumed to be reported net of tax.

Component 6: social benefit income (w_fimnsben_dv)

This includes receipts reported in income record where w_ficode equals [1] “state retirement (old age) pension”, [5] “a widow’s or war widow’s pension”, [6] “a widowed mother’s allowance / widowed parent’s allowance”, [7] “pension credit (includes guarantee credit & saving credit)”, [8] “severe disablement allowance”, [9] “industrial injury disablement allowance”, [10] “disability living allowance”, [11] “attendance allowance”, [12] “carer’s allowance (formerly invalid care allowance)”, [13] “war disablement pension”, [14] “incapacity benefit”, [15] “income support”, [16] “job seeker’s allowance”, [18] “child benefit (including lone-parent child benefit payments)”, [19] “child tax credit”, [20] “working tax credit (includes disabled person’s tax credit)”, [21] “maternity allowance”, [22] “housing benefit”, [23] “council tax benefit”, [30] “foster allowance / guardian allowance”, [31] “rent rebate (NI only)”, [32] “rate rebate (NI only – offset against rates)”, [33] “employment and support allowance”, [34] “return to work credit”, [36] “in-work credit for lone parents”, [37] “other disability related benefit or payment”, [39] “income from any other state benefit (not asked in Wave 1), [40] “universal credit” (from Wave 4), [41] “personal independence payments” (from Wave 4). This is assumed to be reported net of tax. [43] “Child Disability Payment”, [44] “Adult Disability Payment”, [45] “Pension Age Disability Payment”, [46] “Scottish Child Payment” (from Wave 14).

Personal gross monthly income can be decomposed into three subcomponents: labour income (w_fimnlabgrs_dv*), equal to the sum of gross usual pay (w_paygu_dv*), self-employment pay (w_seearngrs_dv*) and gross second-job pay (w_j2pay_dv); annual income from savings and investments (w_fiyrinvinc_dv)/12; and monthly income from benefits and other sources (w_fibenothr_dv).

Less commonly, a researcher may be interested in the individual components of unearned income, such as individual benefit amounts. These are recorded in a separate data file (w_income). This file lists all reported unearned sources. There may be multiple receipts of income from the same source in this file. For example, a respondent may have multiple pensions from a previous employer. Multiple receipts of a given income source are summed. These sums are recorded into the variable w_frmnthimp_dv. Therefore, for a given income source, w_frmnthimp_dv is equal to the total value of all receipts from that source for the first income receipt, it is set to zero for the subsequent receipts. The same income source may get reported by more than one member of the household. To avoid double counting when constructing household income totals, the derived variable w_frjtkeep_dv identifies which one should be included in the household total. Note, the w_income file does not include individual income amounts for non-respondents in responding households.