Relative and absolute poverty: what it means
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
Questions that use this term
- 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?
Related terms
- 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.
- Median: The middle value when all values are ordered from lowest to highest. Half are above and half below, so a few very large values cannot pull it up.
- Real terms: A figure adjusted to remove the effect of inflation, so amounts from different years can be compared by what they would buy rather than their face value.
More jobs, pay and living standards terms: ILO unemployment · Claimant count · Economic inactivity · Full-time equivalent (FTE) and headcount · Headcount · Before and after housing costs (BHC and AHC) · NEET (not in education, employment or training) · Employment rate · Average weekly earnings (AWE) · Payrolled employees (PAYE RTI) · Real household disposable income (RHDI) · Households below average income (HBAI).