Who is experiencing persistent low income in the UK?

How the Department for Work and Pensions is using Understanding Society to measure changes in low income over time. 

Impact

The DWP produces Income Dynamics reports, which maintain a commitment by the government made under the 2016 Welfare Reform and Work Act, to publish data on children living in low income households, including those in persistent low income households. 

The approach taken by DWP to examine poverty persistence is part of a wider discussion about the nature of poverty, which used to focus on snapshots in time. Longitudinal data allows the examination of transitions into, and out of, poverty and its persistence. 

Findings from the research

The DWP used Understanding Society to track individuals at 2010-11 and followed them in the period 2011-15. Over this time, there was limited movement between income quintiles, with 25 per cent of people in the lowest income quintile moving up to the next quintile and only four per cent reaching the highest income quintile. The analysis found that families with children and pensioners were more likely to experience persistent low income. Lack of education qualifications had a detrimental impact on earning power, with people with no qualifications being six times more likely to be in persistent low income. Having a long-standing illness also plays a role, with this group also more likely to be in low pay jobs. 

Further information

This research was undertaken by DWP; The Income Dynamics findings and methodological reports are available here

In addition to capturing a lot of information on incomes, [Understanding Society] also captures a lot of contextual information on the household and individual circumstances, such as employment, education level and disability” (Income Dynamics: Background information and methodology, DWP 2017). 

Download the case study: Who is experiencing persistent low income in the UK?