Table 1

Defining poverty

Absolute poverty
  • When a person’s income level falls below some minimum level necessary to meet basic needs. In October 2015, the World Bank set a new global poverty line at US$1.90 a day.

  • ‘Living below the UK absolute poverty line’ is defined as having a household income below 60% of the UK median (as measured in 2011, adjusted for inflation). Confusingly, although this is known as ‘absolute poverty’, this is in fact also a ‘relative’ measure (although relative to a historical population income in 2011)—but is considered ‘absolute’ because no comparison is made with current income or household costs.

Relative poverty
  • This considers one’s location and what it means to be poor in a particular society. People are in relative poverty if their income falls below the minimum amount needed for them to maintain the average standard of living, in the society in which they live.

  • An example is Households Below Average Income. This survey considers a person in the UK to be living in poverty if their income is <60% of the current median UK household income. In 2016–2017, this was £425 a week after housing costs (£22 100 a year).

  • Relative poverty may also be reported either before or after housing costs are taken into account. Relative income after housing costs is often considered a more meaningful measure of poverty, given that housing costs are a significant (and unavoidable) expenditure.

Material deprivation
  • The inability to afford basic resources and services such as sufficient food, heating, clothing and so on.

Proxy measures of poverty
  • Other proxy measures used to assess poverty include those families in receipt of income-related benefits, or being in receipt of means tested free school meals.