Jobs, pay and living standards: statistics terms explained
How official statistics count people in work, out of work and on low incomes, and the definitions that make the counts differ.
ILO unemployment
The internationally agreed definition of unemployment: people without a job who have looked for work in the past four weeks and can start within two weeks.
ILO unemployment is the definition set by the International Labour Organization and used by the ONS for the UK unemployment rate. A person is unemployed if they are without a job, have actively sought work in the last four weeks and are available to start in the next two weeks, or are waiting to start a job in the next two weeks.
Worked example
Take a hypothetical group of 1,000 people aged 16 and over: 600 in work, 30 unemployed on the ILO definition, and 370 neither working nor looking (economically inactive).
- The economically active total is 630.
- The unemployment rate is 30 divided by 630, about 4.8%. It is a share of the active population, not of everyone.
How it trips up claims
- ILO unemployment comes from the Labour Force Survey, not benefit records, so it differs from the claimant count.
- Someone who wants work but has stopped looking is counted as inactive, not unemployed.
- Because the definition is international, it allows comparison with other countries.
See the latest unemployment rate.
Also searched as: unemployment rate definition, ILO definition of unemployment, International Labour Organization unemployment, LFS unemployment
Related: Claimant count · Economic inactivity · Survey sample · Rolling average · What is the UK unemployment rate? · How is UK unemployment calculated?
Claimant count
The number of people claiming benefits principally because they are unemployed: Jobseeker's Allowance and Universal Credit claimants required to look for work.
The claimant count measures people claiming benefits principally for the reason of being unemployed. Since Universal Credit replaced Jobseeker's Allowance for most new claims, it covers people claiming Jobseeker's Allowance plus Universal Credit claimants who are required to search for work. The ONS publishes it monthly from DWP and Jobcentre Plus records.
Worked example
A hypothetical area has 2,000 people in the claimant count but a survey estimate of 3,000 ILO unemployed. Both can be correct: some unemployed people do not claim benefits, and some claimants count as employed in the survey because they work a few hours on low pay.
How it trips up claims
- The claimant count is not the unemployment rate. The headline rate is ILO unemployment from the Labour Force Survey.
- Universal Credit rules widened the group required to look for work, so the count is not directly comparable with the older JSA-only series. The ONS explains these changes in its methodology notes.
- Because it comes from administrative data, it is available for small areas where survey estimates are less reliable.
Also searched as: claimant count meaning, JSA claimants, out-of-work benefit claimants, claimant count vs unemployment
Related: ILO unemployment · Administrative data · Economic inactivity · How is UK unemployment calculated? · How many people claim Universal Credit? · How many people claim benefits in the UK?
Economic inactivity
People who are not in work and not looking for or available for work, such as students, carers, retired people and those who are long-term sick.
A person is economically inactive if they are neither employed nor ILO unemployed: they are not in work, and either have not looked for work in the past four weeks or cannot start within two weeks. The ONS headline inactivity rate covers people aged 16 to 64.
Main groups
The Labour Force Survey records the main reason for inactivity: studying, looking after family or home, long-term sickness, temporary sickness, early retirement, and other reasons. Some inactive people say they would like a job.
Worked example
Among a hypothetical 1,000 people aged 16 to 64: 750 employed, 30 unemployed and 220 inactive. The inactivity rate is 22%. If 20 of the unemployed stop looking for work, unemployment falls to 10 and inactivity rises to 240, even though nobody found a job.
How it trips up claims
- A falling unemployment rate can reflect people moving into inactivity rather than into work. Check the employment rate too.
- Inactivity is not the same as being on benefits; many inactive people, such as students, claim none.
See the latest inactivity rate.
Also searched as: economically inactive, inactivity rate, economic inactivity definition, not in the labour force
Related: ILO unemployment · Claimant count · Survey sample · What is the UK unemployment rate? · How is UK unemployment calculated? · How many people claim PIP?
Full-time equivalent (FTE) and headcount
FTE converts part-time posts into full-time units, so two half-time staff count as one FTE. Headcount counts each person once regardless of hours.
Full-time equivalent (FTE) measures staff numbers in terms of full-time workloads. A full-time worker counts as 1.0, someone working half the standard hours as 0.5. Headcount counts each person once whatever their hours (see headcount).
Worked example
A hypothetical team has 6 full-time nurses and 4 nurses working half time.
- Headcount: 10.
- FTE: 6 + (4 x 0.5) = 8.
If two full-time nurses later move to half time, headcount stays at 10 but FTE falls to 7.
How it trips up claims
- "Record numbers of staff" may be a headcount that rose because more people work part time, while FTE stayed flat. Check which measure is quoted.
- FTE is better for capacity (how much work can be done); headcount is better for how many individuals are employed.
- Definitions of a full-time week differ between sectors, so FTE totals from different organisations may not be strictly comparable.
NHS workforce statistics and ONS public sector employment statistics publish both measures.
Also searched as: FTE, FTE vs headcount, full time equivalent meaning, whole-time equivalent, WTE
Related: Headcount · Mean · How many staff work for the NHS? · How many GPs are there in England? · How many teachers are there in England? · How many police officers are there in England and Wales?
Headcount
A count of individual people, each counted once regardless of how many hours they work or how many posts they hold.
Headcount is the number of individual people in a group. In workforce statistics, a person counts as one whether they work 10 hours or 40 hours a week. Some publications count people once even if they hold two posts in the same organisation; others count posts, so check the definition.
Worked example
A hypothetical hospital employs 500 people: 300 full time and 200 part time at an average of 0.6 of full hours. Headcount is 500. Full-time equivalent is 300 + (200 x 0.6) = 420.
Headcount outside workforce statistics
The term is also used for simple counts of people in a place at a moment, such as a prison population on a given date or pupils on a school roll on census day.
How it trips up claims
- A claim of "1,000 more staff" may compare headcount in one year with FTE in another.
- Headcount on a single snapshot date can differ from the average over a year.
- Headcount of people and count of posts or jobs are different: one person can hold two jobs.
Also searched as: head count, number of people, headcount meaning, headcount vs FTE
Related: Full-time equivalent (FTE) and headcount · How many staff work for the NHS? · How many police officers are there in England and Wales? · What is the UK prison population? · How many pupils are in schools in England?
Relative and absolute poverty
Relative poverty means household income below 60% of the median in that year. Absolute poverty uses 60% of a fixed past median, adjusted only for inflation.
The UK's main poverty statistics come from DWP's Households Below Average Income (HBAI) series. Two measures are used:
- Relative poverty: household income below 60% of the median income in the same year. The line moves as typical incomes move.
- Absolute poverty: income below 60% of the median in a fixed base year (2010-11), uprated only for inflation. The line keeps the same real value over time.
Worked example
Suppose hypothetical median income falls from £600 to £570 a week in real terms. The relative line falls from £360 to £342, so a household on £350 moves out of relative poverty even though its income did not change. On the absolute measure, the line stays at £360 in real terms, so the household is still counted.
How it trips up claims
- Relative poverty can fall in a recession if middle incomes fall faster than low incomes.
- Each measure is published before and after housing costs, giving four headline figures.
- Check the year, the measure and the group (children, pensioners, all individuals).
Also searched as: relative poverty, absolute poverty, 60% of median income, poverty line UK, HBAI
Related: Before and after housing costs (BHC and AHC) · Median · Real terms · How many people are in poverty in the UK? · What is the poverty line in the UK? · How many children are in poverty in the UK? · How many pensioners live in poverty?
Before and after housing costs (BHC and AHC)
Two ways of measuring household income: before housing costs (BHC) counts income as received; after housing costs (AHC) deducts rent, mortgage interest and similar costs.
DWP income and poverty statistics report incomes on two bases:
- Before housing costs (BHC): net household income after tax and including benefits.
- After housing costs (AHC): the same income minus housing costs such as rent, mortgage interest, water rates and structural insurance.
Both are adjusted for household size and composition (equivalised).
Worked example
Two hypothetical households each have £500 a week BHC. One owns outright and has £20 of housing costs; the other rents and pays £200. AHC incomes are £480 and £300. On a BHC basis they look identical; on an AHC basis the renter has far less to live on.
How it trips up claims
- AHC poverty rates are usually higher than BHC rates, especially for children and renters, because housing costs take a larger share of low incomes.
- Pensioners often own outright, so their AHC position can look different from their BHC position.
- Comparing a BHC figure with an AHC figure from another year mixes measures. HBAI tables label each clearly.
Also searched as: AHC, BHC, after housing costs poverty, before housing costs meaning, equivalised income
Related: Relative and absolute poverty · Median · How many children are in poverty in the UK? · How many people are in poverty in the UK? · How many pensioners live in poverty?
NEET (not in education, employment or training)
Young people, usually aged 16 to 24, who are not in any form of education, employment or training. Counts include both unemployed and economically inactive young people.
NEET stands for not in education, employment or training. The ONS headline measure covers people aged 16 to 24 in the UK and is estimated each quarter from the Labour Force Survey. A NEET young person can be unemployed (looking for work) or economically inactive, for example because of illness or caring.
Why it matters when checking a claim
- Different producers, different measures. The ONS publishes a UK figure; the Department for Education publishes figures for England for ages 16 to 18 and 16 to 24, including local authority data on 16 and 17 year olds. These are not interchangeable.
- Survey uncertainty. The quarterly ONS estimate has a sampling margin, so small quarter-to-quarter changes may not be meaningful. The ONS advises caution with short-term movements.
- Number or rate? A rising number can reflect a growing population of young people; check the percentage too.
See how many young people are NEET.
Also searched as: NEET meaning, NEET uk, NEET statistics, not in education employment or training
Related: Economic inactivity · ILO unemployment · Labour Force Survey (LFS) · Confidence interval · How many young people are not in education, employment or training (NEET)? · What is the UK unemployment rate?
Employment rate
The percentage of people in a given age group who are in work. The UK headline rate covers people aged 16 to 64.
The employment rate is the share of people in an age group who are in paid work, including employees, the self-employed and people on government training schemes. The ONS headline measure is for people aged 16 to 64, estimated from the Labour Force Survey and published monthly as a rolling three-month figure.
Why it matters when checking a claim
- Rate or level? The number of people in work can hit a record simply because the population has grown, while the rate stays flat or falls.
- Which age group? The 16 and over rate is lower than the 16 to 64 rate because it includes most retired people.
- Survey problems. Falling response to the Labour Force Survey has made recent estimates less certain; the ONS sets out caveats in each release. Payroll data from HMRC give a separate view of employees only (see payrolled employees).
- Employment rate plus unemployment rate do not add to 100%. They use different denominators.
The latest figure is on the employment rate key figure page.
Also searched as: employment rate uk, employment rate meaning, employment rate 16 to 64, how many people are in work
Related: ILO unemployment · Economic inactivity · Labour Force Survey (LFS) · Payrolled employees (PAYE RTI) · What is the UK unemployment rate? · How is UK unemployment calculated? · How many people are self-employed in the UK?
Average weekly earnings (AWE)
The ONS monthly measure of what employees in Great Britain are paid each week on average, reported for regular pay and total pay including bonuses.
Average weekly earnings (AWE) is the ONS's main monthly measure of pay. It comes from a survey of businesses about the wages and salaries they pay, and covers employees in Great Britain. It is reported as regular pay (excluding bonuses) and total pay (including bonuses), for the whole economy and for the public and private sectors.
Why it matters when checking a claim
- Growth is usually a three-month average. Headline pay growth compares the average of three months with the same three months a year earlier.
- Nominal or real? "Real pay" adjusts AWE for inflation using CPI or CPIH. See are wages rising faster than inflation.
- A mean, not a median. AWE is a mean, so high earners pull it up. The annual ASHE survey gives the median.
- Self-employed people are excluded.
The latest figure is on the average weekly earnings key figure page.
Also searched as: AWE, wage growth uk, regular pay, total pay, average weekly earnings uk
Related: Mean · Median · Real terms · Payrolled employees (PAYE RTI) · Are wages rising faster than inflation in the UK? · What is the average salary in the UK? · How are public sector pay rises decided?
Payrolled employees (PAYE RTI)
The count of employees paid through HMRC's PAYE system, published monthly from Real Time Information. It covers employees only, not the self-employed.
Payrolled employees are people paid through employers' PAYE payroll schemes, as reported to HMRC through Real Time Information (RTI). The ONS publishes monthly estimates of the number of payrolled employees and their median pay, by region and industry, as accredited official statistics.
Why it matters when checking a claim
- Early figures are revised. The most recent month is a flash estimate based on incomplete returns and is often revised, sometimes by tens of thousands. Treat the latest month with care.
- Not total employment. Self-employed people and some others are not included, so the figure differs from the Labour Force Survey employment count.
- Jobs or people? The headline counts people, but someone with two payroll jobs is still one employee.
- Useful cross-check. Because it does not rely on a survey, it is a useful check when survey-based figures are uncertain.
Also searched as: PAYE RTI, payrolled employees meaning, HMRC RTI data, real time information statistics
Related: Employment rate · Administrative data · Provisional figures · Revisions · What is the average salary in the UK? · How many job vacancies are there in the UK?
Real household disposable income (RHDI)
The total income households have available to spend or save after taxes and benefits, adjusted for inflation. Often expressed per head.
Real household disposable income (RHDI) is the income the household sector has after paying taxes and receiving benefits, adjusted for changes in prices. The ONS publishes it quarterly in the national accounts, both as a total and per head. It is the measure the OBR uses when it forecasts changes in living standards.
Why it matters when checking a claim
- National accounts, not households. RHDI is an aggregate for the whole household sector (including some non-profit bodies). It does not show how any typical household is doing; for that, use survey measures such as HBAI.
- Per head matters. Total RHDI can rise because the population grows. Claims about living standards should use the per-head figure.
- Volatile and revised. Quarterly figures can swing sharply and are often revised.
See what is the median household income in the UK.
Also searched as: RHDI, real disposable income per head, living standards measure, household disposable income
Related: Households below average income (HBAI) · Real terms · Per capita (per head) · Median · What is the median household income in the UK? · Are wages rising faster than inflation in the UK?
Households below average income (HBAI)
The DWP's annual statistics on the distribution of household income in the UK, the main source for official poverty figures.
Households below average income (HBAI) is the Department for Work and Pensions' annual publication on household incomes in the UK. It uses the Family Resources Survey and reports income before and after housing costs, adjusted for household size. It is the source of the main UK measures of relative and absolute poverty, including child and pensioner poverty.
Why it matters when checking a claim
- Financial years, published with a lag. Figures cover a financial year and appear about a year after it ends.
- Survey-based. Year-to-year changes can fall within sampling error; DWP highlights which changes are statistically significant.
- Several poverty lines. Relative or absolute, before or after housing costs: four headline measures that can move in different directions.
- Pandemic gap. Data for 2020 to 2021 were affected by lower survey response and should be compared with care.
See how many people are in poverty in the UK.
Also searched as: HBAI, HBAI statistics, DWP poverty statistics, Family Resources Survey poverty
Related: Relative and absolute poverty · Before and after housing costs (BHC and AHC) · Median · Deciles and quintiles · How many people are in poverty in the UK? · How many children are in poverty in the UK? · What is the poverty line in the UK?
Gini coefficient
A single number summarising inequality of income or wealth, from 0 (everyone has the same) to 100 or 1 (one person has everything).
The Gini coefficient summarises how unequally income (or wealth) is shared across a population. It ranges from 0, where everyone has exactly the same, to 1 (or 100%), where one person has everything. The ONS and DWP both publish Gini coefficients for UK household income.
Why it matters when checking a claim
- Which income? The Gini for original income (before taxes and benefits) is much higher than for disposable income. A claim needs to say which stage of income it uses.
- Different sources give different values. The ONS figures come from the Household Finances Survey, the DWP's from the Family Resources Survey in HBAI, and international comparisons from the OECD use their own definitions.
- It hides where change happens. The same Gini can result from very different patterns, so ratios between deciles are a useful companion.
See what is the Gini coefficient for the UK.
Also searched as: Gini index, income inequality measure, Gini coefficient meaning, Gini coefficient uk
Related: Deciles and quintiles · Households below average income (HBAI) · Median · What is the Gini coefficient for the UK? · What is the median household income in the UK?