Field: Weighted median of Net 2010-11 Absolute Median Household Income (BHC) in latest prices (weekly, equivalised, SPI-adjusted in CPI-adjusted real terms)

Description

The purpose of this measure is to present a time-series of how net 2010-11 absolute median household income BHC and AHC has changed over time in year prices, whilst the value for latest year will be fixed across all individuals for all years as it is the net 2010-11 absolute median income in the latest survey year prices.

Weighted median of Net 2010-11 Absolute Median Household Income (BHC) in latest prices (weekly, equivalised SPI-adjusted in CPI-adjusted real terms), as reported by FRS respondents, where:

• weighted indicates that underlying sample of individuals in the Family Resources Survey (FRS) has been weighted or 'grossed up' to represent groups of individuals with certain characteristics in the whole population.
• median income is the middle household income identified by dividing the population of individuals, when ranked by income, into two equal-sized groups.
• 2010-11 absolute net household income is the UK net household income in 2010-11.
• the definition of a household used in the Family Resources Survey (FRS) is 'one person living alone or a group of people (not necessarily related) living at the same address who share cooking facilities and share a living room, sitting room, or dining area'. So, for example, a group of students with a shared living room would be counted as a single household even if they did not eat together, but a group of bed-sits at the same address would not be counted as a single household. A household may consist of one or more benefit units, which in turn will consist of one or more people (adults and children) - see Family Type for more information.
• income:
• is from all sources from all household members (including children's):
• usual net earnings from employment;
• profit or loss from self-employment (losses are treated as negative income);
• income from director's dividends (from 2021/22);
• state support - all benefits and tax credits, including state pension;
• income from occupational and private pensions;
• investment income;
• maintenance payments, if a person receives them directly;
• income from educational grants and scholarships;
• the cash value of certain forms of income in kind, including free school meals.
• is net of (after deductions have been removed for):
• income tax payments and National Insurance contributions;
• domestic rates/council tax;
• contributions to occupational pension schemes;
• all maintenance payments;
• student loan repayments;
• parental contributions to students living away from home.
• is equivalised: an adjustment is made to income to make it comparable across households of different size and composition.
• is SPI-adjusted: an adjustment is made to sample cases at the top of the income distribution to correct for under-reporting of earnings and volatility in the highest incomes captured in the survey.
• Before Housing Costs (BHC) indicates the following housing costs have not been deducted from income:
• rent (gross of housing benefit).
• water rates, community water charges and council water charges.
• mortgage interest payments.
• structural insurance premiums.
• in latest prices indicates variants of the Consumer Price Index (CPI) are used to adjust income for inflation to look at how incomes are changing over time in real terms.

Note: Negative incomes BHC are reset to zero.

HBAI estimates incorporate widely-used international standard measures of low income and inequality. The primary measure used in HBAI is equivalised disposable household income adjusted for household size and composition (through a process called equivalisation), estimated on both a before and after housing costs basis (BHC and AHC). Our main income measure includes contributions from earnings, state support, pensions, and investment income among others, and is net of tax.

HBAI uses this equivalised disposable household income as a proxy for living standards. A household is said to be in relative low income if their equivalised income is below 60 per cent of median income, while they are said to be in absolute low income if their equivalised income is below 60 per cent of the 2010/11 median income adjusted for inflation.

In line with international best practice, the income measures used in HBAI are subject to several statistical adjustments and, as such, are not always directly relatable to income amounts as they might be understood by people on a day-to-day basis. These adjustments, however, allow us to compare measures over time and across households of different sizes and compositions on a consistent basis.

HBAI uses variants of CPI inflation when estimating how incomes are changing in real terms over time.

Classification

Applicable to: All Individuals.

• Median of net 2010-11 absolute median household income (BHC) in latest prices.

Quality Statement

During 2022/23 the government announced and implemented additional support to families with several cost-of-living support schemes, depending on peoples' circumstances. These payments are included as part of the relevant income variables in HBAI.

From 2021/22, income received from director's dividends is included in the estimates following an addition to the Family Resources Survey. From 2022/23 they are only included where directors are classed as employees following a methodological review. The income is treated as income from earnings.

For the 2021/22 estimates, wages are treated as income from employment rather than state support, irrespective of any support payments from Coronavirus Job Retention Scheme (CJRS) that the respondent's employer was receiving in respect of their employment. Amounts received through the Self-Employment Income Support Scheme (SEISS) for the self-employed are indirectly included as part of the reporting of profit data for the most recent available tax year.

Further information can be found in the HBAI Quality and Methodology Report here.

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