Wealth and Poverty in the UK

How is Wealth measured?

Wealth is made up of the Wealth is made up of the assetsassets that are that are owned by people living in a country:owned by people living in a country:

HousingHousing State pensionsState pensions Private pensions Private pensions SavingsSavings

What counts as income?

EmploymentEmployment PensionsPensions BenefitsBenefits Self-employed incomeSelf-employed income Rent, dividends, interestRent, dividends, interest OthersOthers

How wealthy is the UK?

In 2003, UK’s GDP per head was In 2003, UK’s GDP per head was £17,300£17,300

In 2012 it was £22,205In 2012 it was £22,205 UK is the 19UK is the 19thth richest in the OECD richest in the OECD

group of countries (there are 29 in group of countries (there are 29 in the group)the group)

UK is the 22UK is the 22ndnd richest country in the richest country in the world out of 192world out of 192

Relative and Absolute Poverty Absolute Poverty is when people are Absolute Poverty is when people are

deprived of two or more of the seven deprived of two or more of the seven basic needs: clean water, sanitation, basic needs: clean water, sanitation, shelter, education, information, food and shelter, education, information, food and health.health.

Relative Poverty is when people do not Relative Poverty is when people do not get access to products and services that get access to products and services that society considers to be necessary for society considers to be necessary for basic living. This type of poverty varies basic living. This type of poverty varies significantly as society changes.significantly as society changes.

How do we measure poverty in the UK?

1.1. Households Below Average IncomeHouseholds Below Average Income (HBAI). Those with less than 60% of (HBAI). Those with less than 60% of median incomemedian income

2.2. Persons on Income SupportPersons on Income Support

3.3. Poverty and Social Exclusion SurveyPoverty and Social Exclusion Survey (people who lacked more than 2 of the (people who lacked more than 2 of the items considered necessary for modern items considered necessary for modern living – 26% of the population were living – 26% of the population were found to be ‘poor’found to be ‘poor’

Poverty and Social Exclusion in the UK In 1979, 5 million were classed as poorIn 1979, 5 million were classed as poor Poverty grew significantly during the 1980sPoverty grew significantly during the 1980s Between 1979 and the mid 1990s, the income of Between 1979 and the mid 1990s, the income of

the richest 10% went up by 65%, but…the richest 10% went up by 65%, but… The income of the poorest 10% went down by The income of the poorest 10% went down by

13%13% Peaked in the 1990s at 14 millionPeaked in the 1990s at 14 million Fell to 12.4 million in 2003Fell to 12.4 million in 2003 It has remained persistently high sinceIt has remained persistently high since 1 in 4 people live in poverty1 in 4 people live in poverty 1 in 3 children live in poverty1 in 3 children live in poverty

Recent Trends

90s and “naughties” saw some positive trends90s and “naughties” saw some positive trends fewer poor in low-income households with fewer poor in low-income households with

children children fewer poor in low-income households with fewer poor in low-income households with

pensioners pensioners

ButBut more poor among working-age adults without more poor among working-age adults without

dependent childrendependent children Currently poverty rates are rising Currently poverty rates are rising

Tasks

Read pages 5-7 and answer the following questions.

1. Explain the difference between absolute poverty and relative poverty.

2. Write a sentence to explain how each of the following measures poverty in Britain:

The HBAI report Income Support levels The PSE Survey

3. Summarise the ways in which class structure has changed in the UK in the last 100 years.