Home Personal Finance Background info and methodology: Pensioners’ Incomes Sequence: monetary yr 2020 to 2021

Background info and methodology: Pensioners’ Incomes Sequence: monetary yr 2020 to 2021

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1. Background info

Impression of the coronavirus (COVID-19) pandemic on these statistics

This Pensioners’ Incomes (PI) Sequence publication is the primary survey yr the place knowledge assortment has been impacted by the coronavirus (COVID-19) pandemic. Please see the FRS Background and Methodology for the precise changes which were made in gentle of the coronavirus (COVID-19) impacts on the pattern.

The technical report printed by the Households Under Common Revenue (HBAI) staff explains the coronavirus impacts in additional element which ought to be thought-about alongside interpretation of Pensioners’ Incomes (PI) Sequence statistics

A. Function of the statistics

The PI Sequence comprises estimates of the degrees, sources and distribution of pensioners’ incomes. It additionally examines the place of single pensioners and pensioner {couples}, together with any dependent kids, throughout the earnings distribution of the inhabitants as a complete. That is totally different from Households Under Common Revenue (HBAI). It is because the Pensioners’ Revenue collection solely consists of the earnings of pensioner models and excludes the earnings of different adults dwelling in the identical family.

This can be a key supply of knowledge that’s used to tell Authorities considering on related insurance policies, in addition to associated programmes and tasks. Researchers and analysts exterior authorities use the statistics and knowledge to look at subjects equivalent to ageing, distributional impacts of fiscal insurance policies and the earnings profiles of pensioner teams. Estimates in PI (in addition to in HBAI) are based mostly on knowledge from the Household Sources Survey (FRS).

Learn extra about Pensioners’ Incomes on-line.

Variations of the dataset can be found from the UK Knowledge Service.

UK-level PI knowledge is obtainable on the Stat-Xplore on-line software which permits customers to create their very own PI evaluation. The PI info is obtainable at household (profit unit) degree.

B. Context of the statistics

Pensioners are an more and more massive and numerous group within the inhabitants. There are a variety of current reforms affecting present and future pensioners, together with:

This publication illustrates modifications in pensioners’ incomes over time and places the leads to the context of each financial and coverage modifications.

Pensioner demographics

The Workplace for Nationwide Statistics (ONS) inhabitants estimates for mid-2020 discovered that folks aged 65 and over represented practically one in 5 individuals.

In response to the ONS the UK’s age construction is shifting in the direction of older ages due to declining fertility charges and other people dwelling longer. The variety of individuals of pensionable age, relative to the scale of these anticipated to be of working age, is rising.

Dwelling possession continues to be larger for pensioners in comparison with these of working age. Round three-quarters of pensioners reside in properties which are owned outright (in comparison with roughly one in 5 of the working-age inhabitants), so subsequently face minimal housing prices.

Issues when decoding common pensioner incomes’

PI finds that there are variations in common incomes between age teams. There are a number of causes for this which ought to be famous when decoding these outcomes:

the ‘age’ impact: Older pensioners are much less prone to be in work and therefore obtain a smaller quantity from earnings. Moreover, they’re much less prone to have a companion who’s in work. Any pension(s) they could be in receipt of are associated to their earnings, years of scheme membership, and pension contributions (together with nationwide insurance coverage within the case of the State Pension) they made beforehand of their working lives

the ‘cohort’ impact: The fast rise in occupational pension protection within the Fifties and Sixties may have been extra helpful to later cohorts. Due to this fact, every successive cohort of pensioners has, generally, had the next earnings than the older cohort it successfully replaces, and this has pushed up the common earnings of the pensioner group as a complete. Modifications to the State Pension system over time additionally contribute to this impact. This improve in protection is changing into much less related however will increase in occupational pension earnings remains to be anticipated as later cohorts will contribute extra because of larger earnings

the size of time since retirement: Pensions usually improve by much less beneficiant uprating measures after retirement. As well as, most annuities bought with occupational or private pensions are degree annuities, which don’t improve over time. Revenue in actual phrases is subsequently reducing for these annuities as soon as inflation is taken into account

uprating: The State Pension and Pension Credit score have been uprated by 3.9% in April 2020 underneath the triple lock. This was larger than inflation of round 0.6% and so was a rise in actual phrases for these in receipt

altering State Pension age over time: From 6 April 2010, the State Pension age has been rising steadily for girls, and since December 2018 has been rising for each women and men. The FRS knowledge contained on this report was collected all through FYE 2021, throughout which the State Pension age for each women and men had elevated to 66 years by the tip of the survey yr. On this report, persons are categorised as being above State Pension age based mostly upon their reported start date and the timetable for the legislated will increase in State Pension age

Coverage modifications

Council Tax

The Division for Levelling Up, Housing and Communities estimated that the common Band D tax set by native authorities in England for 2020-21 represented a rise of three.9% from 2019-20 ranges.

In Wales, the common Band D council tax for 2020-21 elevated by 4.8% from 2019-20 ranges.

In Scotland, the common Band D council tax for 2020-21 represented a rise of 4.79% from 2019-20 ranges.

In Northern Eire, the home Regional Fee was frozen for 2020-21. Consequently, it was no larger for 2020-21 than for 2019-20.

Housing Assist for personal renters

In April 2020, Native Housing Allowance charges have been made extra beneficiant, as they elevated to the thirtieth percentile of market rents.

Nationwide Dwelling Wage

In April 2020, the Nationwide Dwelling Wage elevated to £8.72 per hour for workers aged 25 years and over. Staff aged underneath 25 years continued to obtain the Nationwide Minimal Wage. In April 2020, the Nationwide Minimal Wage elevated to £8.20 per hour for these aged 21 to 24 years, £6.45 per hour for these aged 18 to twenty years, £4.55 per hour for these aged underneath 18 years and £4.15 per hour for apprentices.
State Pension

In October 2020, the State Pension age elevated to 66 years for each women and men.

Pensioner TV licences

From 1 August 2020, anybody who was aged 75 years or over and obtained Pension Credit score was entitled to a free TV licence.

Common Credit score £20 uplift

From April 2020, the federal government elevated the usual allowance in Common Credit score by £1,040.04 per yr and the essential ingredient in Working Tax Credit score by £1,045 per yr. Each new and present Common Credit score claimants and present Working Tax Credit score claimants obtained a further £20 per week on prime of annual uprating.

Common Credit score elimination of Minimal Revenue Flooring for self-employed individuals

Between March 2020 and July 2021, the federal government briefly suspended the Minimal Revenue Flooring (MIF) so {that a} drop in a claimant’s earnings was mirrored of their month-to-month Common Credit score fee.

Extreme Incapacity Premium transitional funds

From 27 January 2021, the Extreme Incapacity Premium (SDP) Gateway was eliminated. SDP recipients would as a substitute declare Common Credit score from this date onwards.

The SDP transitional funds have been launched for many who have been entitled to the SDP and migrated to Common Credit score earlier than the SDP Gateway commenced on 16 January 2019. These funds comprised of the next:

£285 a month for single claimants who weren’t receiving the Common Credit score restricted functionality for work and work-related exercise (LCWRA) addition
£120 a month for single claimants who have been receiving the LCWRA addition
£405 a month for joint claimants who have been receiving the upper couple price SDP of their legacy profit
£285 a month for joint claimants who have been receiving the decrease couple price SDP and weren’t receiving the LCWRA addition in UC
£120 a month for joint claimants who have been receiving the decrease couple price SDP and have been receiving the LCWRA addition in UC
a further lump-sum fee to embody the time interval for the reason that claimant moved onto Common Credit score


For 2020-21, the up-rating of inflation-linked profit and tax credit score charges resumed.

This resulted in a rise of 1.7% which was in keeping with the Shopper Costs Index (CPI). This adopted a four-year interval from 2016-17 to 2019-20 the place most working-age advantages together with Jobseeker’s Allowance, Revenue Assist, Common Credit score, Employment and Assist Allowance and Housing Profit; Baby Profit and a few parts of Tax Credit score have been frozen at their 2015-16 values.

Advantages for carers have been excluded from the freeze and continued to be up-rated in step with costs throughout the interval from 2016-17 to 2019-20.

In April 2020:

the State Pension elevated by common weekly earnings of three.9% in step with the ‘triple lock’. The ‘triple lock’ ensured that in 2020-21 the State Pension elevated by the very best of the rise in earnings, value inflation as measured by the CPI or 2.5%
the Commonplace Minimal Assure in Pension Credit score was up-rated by 3.9% in step with earnings. For many who have been single, the Commonplace Minimal Assure in Pension Credit score elevated from £167.25 per week to £173.75 per week which was a money improve of £6.50. For {couples}, this elevated from £255.25 per week to £265.20 per week which was a money improve of £9.95
Common Credit score Work Allowances have been up-rated in step with CPI

Hire and mortgage funds

On 17 March 2020, the Authorities introduced that anybody struggling to pay their mortgage or hire because of the coronavirus (COVID-19) pandemic, in addition to landlords with buy-to-let mortgages whose tenants have been unable to pay the hire may apply for a fee vacation. Mortgage holidays have been initially set to run till October 2020 however have been then prolonged to 31 July 2021.

Cost holidays may both last as long as three months or as much as six months. For these persevering with to battle financially as soon as their fee vacation had ended, lenders ought to have offered extra assist by tailor-made forbearance choices.

Landlords and lenders have been prevented from evicting these occupying their properties by the Coronavirus Act 2020. From March 2020 to September 2020, housing possession motion was suspended in courts and a ban on repossessions was in place from November 2020 till the tip of Might 2021.

Self-Employment Revenue Assist Scheme

The federal government launched the Self-Employment Revenue Assist Scheme (SEISS) to assist self-employed people who have been affected by COVID-19. SEISS is for people who find themselves self-employed or a member of a partnership within the UK and have misplaced earnings due to COVID-19. The primary spherical of the SEISS paid taxable grants value 80% of the claimant’s common month-to-month buying and selling revenue, as much as £7,500 in whole, and lined a three-month interval.

The federal government introduced the second spherical of SEISS in Might 2020 with taxable grants value 70% of the claimant’s common month-to-month buying and selling revenue, as much as £6,570 in whole, and encompassing a three-month interval.

In September 2020, the federal government introduced an extension to the SEISS which firstly lined from November 2020 to January 2021 after which from February 2021 to April 2021. The primary of those two grants was value 80% of the claimant’s common month-to-month buying and selling revenue, as much as £7,500 in whole, and the second was partly decided by the quantity that claimant’s turnover had decreased from April 2020 to April 2021.

‘Furlough’ – Coronavirus Job Retention Scheme

In March 2020, the federal government introduced the Coronavirus Job Retention Scheme (CJRS). Employers who have been unable to keep up their workforce due to coronavirus (COVID-19) may put their workers on furlough and apply for a grant. Authorities and employer contributions various throughout the scheme to make sure that an worker obtained not less than 80% of their month-to-month wage, as much as £2,500 a month, together with Nationwide Insurance coverage and any pension contributions. This scheme was in place from March 2020 to September 2021.

C. Supply of the statistics

In 2020 to 2021 a number of elements affected FRS knowledge assortment, response charges and the distribution of traits amongst FRS survey respondents, together with:

change within the mode of interviewing
modifications within the strategies used to contact survey members
modifications in individuals’s behaviours and circumstances throughout the coronavirus (COVID-19) pandemic

Extra particulars on the results of coronavirus (COVID-19) pandemic on the FRS as a complete are included within the FRS Background and Methodology be aware. These ought to assist customers of their use and interpretation of FRS 2020 to 2021 knowledge.

FRS 2020-21 had an achieved pattern dimension of round 10,000 households.

See the technical report printed by the Households Under Common Revenue (HBAI) staff explaining the coronavirus impacts in additional element which ought to be thought-about alongside interpretation of those statistics

The Household Sources Survey (FRS) is the primary underlying knowledge supply for PI. It is without doubt one of the largest cross-sectional family surveys in the UK. The main target of the FRS is on capturing info on family incomes, so it offers extra element on totally different earnings sources than different family surveys, making it the foremost supply of earnings knowledge. The FRS additionally captures contextual info on the family and particular person circumstances, equivalent to employment, schooling degree and incapacity. Total, it’s a complete knowledge supply that enables for a spread of various evaluation.

The PI publication can also be based mostly on the Households Under Common Revenue (HBAI) dataset, which is derived from the FRS. HBAI makes an adjustment for households with very excessive incomes, because the FRS under-records details about these households. The HBAI High quality and Methodology Data Report offers additional particulars on this and different subjects.

The FRS is an annual survey based mostly on monetary years. Knowledge can be found for yearly since FYE 1995.

Pattern dimension: From April 2011, the goal achieved GB pattern dimension for the FRS was decreased by 5,000 households. From FYE 2012 onwards, the general achieved pattern dimension for the UK is round 20,000 households. A printed evaluation concluded that this decreased pattern nonetheless permits the core outputs from the FRS, equivalent to the person measure of earnings in PI, to be produced.

Protection: Till FYE 2002, the FRS lined Nice Britain. Since FYE 2003, Northern Eire has been included, that means the entire of the UK is included in PI. Due to this fact, warning ought to be taken when evaluating outcomes throughout these years.

D. Limitations of the statistics

In abstract in FYE 2021, a number of elements affected FRS knowledge assortment, response charges and the distribution of traits amongst FRS survey respondents, The modifications made to the Household Sources Survey because of COVID-19 resulted in a considerably smaller pattern dimension with round 10,000 interviews in 2020-21 (down from round 19,000 in a standard yr). As well as, the composition of the FRS achieved pattern modified considerably between 2019-20 and 2020-21. We adjusted our grossing regime to enhance the representativeness of the pattern however there stay some unknown biases. When it comes to the decreased pattern dimension because the reliability of the outcomes of pattern surveys, is positively associated to the unweighted pattern dimension, the smaller pattern in 2020-21 can also be contributing to a few of the modifications noticed this yr as there is a rise in statistical uncertainty across the outcomes.

This publication relies on survey knowledge. Due to this fact, it’s topic to potential limitations inherent in all surveys, together with:

sampling error: This can fluctuate to a larger or lesser extent relying on the extent of disaggregation at which ends are offered

non-response error: Systematic bias because of non-response by households chosen for interview within the FRS. The response price for the FRS within the FYE 2021 was 23%. In an try and appropriate for differential non-response, estimates are weighted utilizing inhabitants totals

survey protection: The FRS covers non-public households within the UK. Due to this fact, people in nursing or retirement properties, for instance, won’t be included. Which means that figures referring to essentially the most aged people might not be consultant of the UK inhabitants, as some people on this age group may have moved into properties the place they will obtain extra frequent assist

survey design: The FRS makes use of a clustered pattern design to supply sturdy regional estimates. Due to this fact, the FRS shouldn’t be appropriate for evaluation beneath area degree

pattern dimension: Though the FRS has a comparatively massive pattern dimension for a family survey, small pattern sizes might require a number of years of information to be mixed for some evaluation

Moreover, relative to administrative information, the FRS is understood to under-report profit receipt. Nonetheless, the FRS is taken into account to be one of the best supply for taking a look at profit and tax credit score receipt by traits not captured on administrative sources, and for taking a look at whole profit receipt on a profit unit or family foundation. It’s typically inappropriate to have a look at profit receipt on a person foundation as a result of means-tested advantages are paid on behalf of the profit unit. For additional info on the under-reporting of profit receipt, see the FRS Background be aware and methodology report.

E. Strengths of the statistics

the FRS captures extra element on totally different earnings sources in comparison with different family surveys; this permits the PI collection to analyse and report on the totally different earnings sources for pensioners

the FRS offers info on parts of earnings and housing prices that are unavailable in administrative knowledge

the comparatively very long time collection accessible implies that traits will be assessed going again to FYE 1995, permitting an evaluation of the results of insurance policies and occasions on the incomes of pensioners over time

the vary of demographic breakdowns enable comparisons between the incomes of teams of pensioners based mostly on age, gender, ethnicity and marital standing

confidence intervals are calculated for a variety of estimates utilizing a bootstrapping strategy (see ‘Measuring the scale of sampling error’ beneath). These measures of uncertainty point out whether or not variations between demographic teams and modifications between years are prone to be actual variations or brought on by sampling error

F. Various knowledge sources

There are different knowledge sources that may present info on areas of curiosity just like these within the PI publication. These are listed beneath:

a information to sources of information on earnings and earnings: The ONS has produced a information for customers of official statistics on earnings and earnings. This information compares the primary sources of information accessible and descriptions which sources will greatest meet consumer wants

go to the earnings and earnings interactive software the place you’ll be able to filter by authorities division and nation of curiosity to seek out related statistics

Households Under Common Revenue (HBAI) presents the quantity and share of pensioners dwelling in low earnings households and materials deprivation

the Household Sources Survey (FRS) publication consists of pension participation for working-age people. This reveals those that are saving for retirement and the kind of pension they’re saving in (occupational or private)

Revenue Dynamics (ID) seems to be at modifications in family earnings together with a measure of persistent low earnings, based mostly on Understanding Society knowledge

the DWP Stat-Xplore Device is a software which offers customers with entry to administrative knowledge, in addition to knowledge from HBAI and PI which permits customers to conduct their very own evaluation. Customers can obtain and analyse statistics on a spread of various advantages, programmes, and different administrative info collected and saved by the division

the English Longitudinal Examine of Ageing (ELSA) is a biennial longitudinal examine of the well being, social and financial circumstances of a pattern of roughly 8,500 individuals aged over 50 in England. ELSA began within the early 2000s, with 9 waves of information at the moment printed. It offers longitudinal knowledge on pensions, financial savings, and labour market participation, in addition to info on employment, retirement interactions, and transitions over the life programs of respondents as they get older. ELSA additionally offers info on well being trajectories, incapacity, and wholesome life expectancy

The Wealth and Belongings Survey (WAS) is a big scale longitudinal survey with seven rounds at the moment printed. Spherical 7 (2018 to 2020) had a pattern of round 18,000 non-public households or 39,000 people in Nice Britain. It’s carried out by the Workplace for Nationwide Statistics (ONS). The WAS dataset holds details about the financial standing of households and people together with their bodily and monetary belongings, money owed, and pension provision. WAS knowledge are additionally used to grasp how wealth is distributed and the elements which can have an effect on monetary planning, in addition to a respondents’ attitudes and behaviours in the direction of saving. The Pension Wealth tables in WAS offers estimates of the kinds of non-public (non-state) pension wealth, break up by a variety of socio-demographic and financial breakdowns

the Occupational Pension Scheme Survey (OPSS) was an annual survey, carried out by ONS. It lined occupational pension schemes from the private and non-private sector and samples on the degree of the scheme. The OPSS offered the UK’s longest constant time collection for estimates of pension scheme membership, with knowledge from 1953 to 2018, and it offered estimates of the variety of schemes, scheme members, and their degree of contributions

the Annual Survey of Hours and Earnings (ASHE) is printed by the ONS. It has been in place since 1997 and can be utilized to supply info on earnings for people near or over SPa. It additionally collects important info on worker pension membership and contributions. Throughout the coronavirus pandemic the pattern dimension for 2020 was smaller than the standard (144,000 workers) so ASHE estimates are topic to extra uncertainty in comparison with earlier years. Additionally they present a abstract dataset of pensioner outcomes

the Labour Pressure Survey (LFS) is a steady, massive scale pattern survey carried out by the ONS which offers info on the labour market, together with employment, unemployment, and financial exercise charges. This supply can be utilized to supply info on people near or over SPa within the labour market

the Profit expenditure and caseload tables produced by DWP include historic and forecast profit expenditure and caseload knowledge. These tables embrace long-term projections of pensioner profit expenditure, in addition to State Pension expenditure by nation of residence

DWP profit statistics present a high-level abstract of Nationwide and Official statistics accessible by Stat-Xplore on a spread of advantages, together with the State Pension and Pension Credit score. The principle statistical launch doc is printed on a six-monthly foundation, with some knowledge additionally launched quarterly by way of Stat-Xplore and knowledge tables

private incomes statistics: Her Majesty’s Income and Customs (HMRC) publishes abstract details about people who’re UK taxpayers, their earnings, and the earnings tax to which they’re liable. The information comes from the annual Survey of Private Incomes, which samples administrative knowledge held by HMRC on individuals who could possibly be liable to UK earnings tax for the earnings tax yr. This supply consists of info on earnings and tax for taxpayers of pension age

explaining earnings and earnings offers info on earnings and earnings statistics printed by authorities departments, together with DWP. Comprises info on gender, occupations, the variety of individuals dwelling beneath the minimal wage

altering traits and up to date shortages within the labour market seems to be at employees which have entered or left the workforce and the way this has modified lately

overview of employees who have been furloughed within the UK offers traits of those that have been furloughed within the UK and the way the furlough scheme has affected labour market outcomes and expertise

early insights from the Over 50s Way of life Examine, Nice Britain: Attitudes and causes behind these aged 50 to 70 years leaving the labour market sooner or later in 2021, in Nice Britain between 8 to 13 February 2022

G. Definitions and terminology

Extra info will be discovered within the glossary, beneath.

Pensioner Items

The PI collection offers evaluation on pensioner profit models (often called pensioner models), which embrace:

Age of pensioner models

For evaluation of pensioner models by age, pensioner {couples} are categorised by the age of the Head. The pinnacle of the pensioner unit is the Family Reference Particular person (HRP, see beneath) in the event that they belong to the pensioner unit. In households with a number of profit models, if the HRP shouldn’t be a part of the pensioner unit, the pinnacle of the pensioner unit is the primary individual from the pensioner unit named within the interview. In households the place there’s one individual underneath SPa and one individual over SPa, the youthful individual often is the HRP and subsequently the pinnacle of a pensioner unit needn’t be over SPa.

The Family Reference Particular person (HRP) is the householder with the very best earnings, no matter gender:

in a single grownup family, the HRP is the only householder (i.e. the individual in whose identify the lodging is owned or rented)

if there are two or extra house owners, the HRP is the householder with the very best private earnings from all sources

if there are two or extra house owners who’ve the identical earnings, the HRP is the eldest householder

Within the PI collection, pensioner models are categorized as having just lately reached State Pension age (SPa) if the pinnacle was inside 5 years of SPa on the time of interview. See “just lately reached State Pension age” within the glossary. Pensioner models who just lately reached State Pension age are additionally included within the ‘Below 75’ age group.

It ought to be famous that because of the rising SPa, this definition classifies some pensioners as having “just lately reached State Pension age” even when they reached their SPa greater than 5 years in the past.

For instance, a lady born on 6 April 1951 may have reached SPa on 6 Might 2012, aged 61 years 1 month. When interviewed on 6 July 2020, she is 69 years 3 months outdated and reached her SPa 8 years 2 months in the past. Nonetheless, as a result of the SPa has risen to 65 years 10 months by the date of interview, she remains to be classed as having “just lately reached State Pension age” as a result of she is inside 5 years of the present SPa.


PI estimates don’t replicate earnings from different adults and their dependent kids in a family. For instance, if a pensioner lives with their grownup kids, the youthful adults’ incomes should not included on this evaluation. Whereas the profit earnings of dependent kids is included in estimates, this was solely related for lower than half a per cent of pensioner models in FYE 2021.

Estimates are based mostly on unequivalised earnings, besides when evaluating to the general inhabitants distribution in part 7 of the primary publication and in tables 4.6 and 4.7 of the desk pack. Equivalisation makes an adjustment to earnings to replicate family dimension and composition in an effort to evaluate earnings throughout households as a measure of dwelling requirements, and is used within the HBAI publication. Normally within the PI collection, earnings is proven for single pensioners and pensioner {couples} individually.

Revenue measures

Gross earnings: Within the PI Sequence, gross earnings is usually separated into 6 parts:

These three profit sorts should not exhaustive: there are advantages, equivalent to Winter Gas Funds and Carers’ Allowance, which don’t match into any of those classes however are included in whole profit earnings.

earnings from occupational pensions: worker pensions related to an employer and office

earnings from private pensions: private pensions, annuities purchased with lump sums from private pensions, commerce union and pleasant society pensions

Revenue from non-public pensions is the sum of earnings from occupational pensions and private pensions.

earnings from investments: together with curiosity from Particular person Financial savings Accounts (ISAs) and different financial savings accounts, unit trusts, bonds, shares and shares

earnings from earnings: together with worker earnings and revenue and loss from self-employment

different earnings: advantages from pleasant societies, earnings obtained for dependent kids, upkeep funds and, from November 2000, free TV licences for these aged 75 and over

Extra details about the totally different earnings sources will be discovered within the glossary.

Web earnings Earlier than Housing Prices (BHC) is gross earnings much less:

earnings tax funds

Nationwide Insurance coverage contributions

contributions to pension schemes

native taxes (i.e. council tax or home charges)

upkeep and little one assist funds

pupil mortgage repayments

parental contributions to college students dwelling away from dwelling

Web earnings After Housing Prices (AHC) is derived by deducting a measure of housing prices from the above earnings measure and can also be internet of:

hire (gross of housing advantages)

water charges, group water expenses and council water expenses

structural insurance coverage premiums (for proprietor occupiers)

mortgage curiosity funds (internet of any tax reduction)

floor hire and repair expenses

Revenue from Housing Profit is included inside gross earnings as an income-related profit. Capital mortgage repayments should not deducted as a Housing Value, as that is considered an asset being accrued and never a value.

We use AHC figures all through the PI publication until in any other case acknowledged, as it is a higher reflection of pensioners’ disposable incomes.

H. Nationwide Statistics Standing

Nationwide Statistics standing implies that our statistics meet the very best requirements of trustworthiness, high quality and public worth, and it’s our duty to keep up compliance with these requirements.

The statistics underwent a full evaluation in opposition to the Code of Apply for Statistics in 2011 and have been confirmed as Nationwide Statistics in November 2012 by the Workplace for Statistics Regulation.

Because the newest overview by the Workplace for Statistics Regulation, we now have continued to adjust to the Code of Apply for Statistics, and have made quite a few enhancements together with:

It’s DWP’s duty to keep up compliance with the requirements anticipated of Nationwide Statistics. If DWP turns into involved about whether or not these statistics are nonetheless assembly the suitable requirements, we are going to focus on any issues with the Workplace for Statistics Regulation. Nationwide Statistics standing will be eliminated at any level when the very best requirements should not maintained, and reinstated when requirements are restored.

Learn additional details about Nationwide Statistics on the UK Statistics Authority web site.

DWP considers that every one PI Sequence statistics on this publication are “Totally Comparable at degree A*” of the UK International locations Comparability Scale throughout international locations.

I. High quality Assertion

The PI Sequence relies on the HBAI dataset. This dataset undergoes substantial checking and verification each internally inside DWP, and externally by the Institute for Fiscal Research (IFS). When producing charts and tables for the publication, all content material is independently high quality assured by totally different members of the PI staff to make sure methodology is strong. All commentary within the PI report is reviewed by the PI staff and analysts from the related coverage areas inside DWP to make sure the knowledge offered is correct and meets consumer wants.

J. Suggestions

If in case you have any feedback or questions, please contact:

Joanne Burrage,

Pensioners’ Incomes Sequence Group Chief, Surveys Department,

Division for Work and Pensions,

Benton Park View,

Benton Park Highway,

Newcastle Upon Tyne,

NE98 1YX

E-mail: pensioners incomes@dwp.gov.uk

DWP Press Workplace: 0115 965 8781

Okay. Acknowledgements

Publication Lead: Isaac Farrier

2. Methodology

Factors to notice

Focused on how a lot earnings pensioners obtain earlier than any taxes are utilized; Or focused on totally different sources of earnings.
Focused on earnings accessible for pensioners to spend (excluding the earnings of different family members), both Earlier than or After housing prices.
Focused on all earnings accessible to pensioner models in a selected group; Don’t think about the affect of the very best incomes to be a significant drawback; Or focused on breaking down earnings by supply.
within the earnings of the ‘typical’ pensioner unit; Don’t want the common distorted by a small variety of excessive incomes; Or are taking a look at distributions of incomes.
Common (imply or median) for all
Focused on all earnings accessible to pensioner models; Or wish to embrace these with no earnings from a selected supply.
Common (imply or median) for these in receipt
within the common ‘price’ at which individuals obtain earnings from a selected supply; Or are focused on a person supply of earnings.
All pensioner models
Focused on broad traits in money quantities for pensioners (each in {couples} and singles) as a complete.
Singles and {couples} individually
Evaluating subgroups that include totally different proportions of singles and {couples}; Or taking a look at distributions of earnings.
After housing prices
within the earnings accessible for pensioners to spend after their housing prices have been met; Contemplating modifications on this internet earnings over time; Or for evaluating pensioners’ incomes with working-age incomes.
Earlier than housing prices
Focused on whole internet earnings.

A. Rounding and Accuracy

Within the tables and publication, the next conventions have been used.

Nil (none recorded within the pattern)

Negligible (lower than 0.5% or 50p)
Not accessible because of small pattern dimension (fewer than 50 for averages, fewer than 100 for percentages) or because of lower than three years of comparable knowledge in three-year common tables.

Figures have been rounded to the closest pound or share level. Inhabitants sizes have been rounded to the closest 0.1 million. Particular person figures have been rounded independently, so the sum of element objects doesn’t essentially equal the totals proven.

B. Measuring dwelling requirements

Incomes are sometimes used as a measure of the ‘way of life’ achieved by totally different teams. Nonetheless, there are various different elements that may have an effect on dwelling requirements, equivalent to wealth, bodily well being and expenditure. These elements should not thought-about on this report. Moreover, estimates of incomes within the PI Sequence solely think about the earnings of the pensioner profit unit.

Pensioners’ requirements of dwelling can also be affected by the earnings of different grownup members of the family or their dependents. Additionally, no adjustment (equivalisation) is made for single pensioners in comparison with {couples}. Revenue estimates ought to subsequently solely be considered broadly indicative of pensioners’ total dwelling requirements.

Materials deprivation for pensioners, a further indicator for measuring dwelling requirements, has been included within the HBAI publication since FYE 2010 and is derived from a collection of questions within the FRS. A last rating is calculated from the set of questions and in contrast with a threshold rating to find out whether or not a pensioner is in materials deprivation.

For particulars of the fabric deprivation indicator, see: Division for Work and Pensions Working Paper Quantity 54. For the most recent outcomes on the share of pensioners in low-income households and materials deprivation, see the HBAI publication for FYE 2021.

Detailed info on the measuring and manufacturing of the FRS dataset will be discovered on this yr’s FRS Background be aware and methodology report. This additionally consists of info on the survey design, sampling, assortment, and high quality assurance processes.

C. Grossing

The FRS grossing regime this yr has been tailored to manage for the impression of COVID-19 upon the achieved pattern. While the prevailing FRS grossing regime introduced estimates near the age and tenure profile of the UK inhabitants, it retained a disproportionate variety of respondents who had been educated to not less than diploma degree. It was essential to regulate for this bias as a result of earnings ranges are strongly correlated with the extent of schooling achieved. Due to this fact, extra grossing controls have been launched to rebalance the tutorial ranges of these within the pattern.

The grossing regime has additionally been tailored to manage for the differential degree of response by the yr. There have been fewer responses within the early months of the survey yr than in later months. This isn’t usually a function of the FRS achieved pattern, with response usually unfold comparatively equally over every twelve-month run of fieldwork.

There has, nevertheless, been no change to the general inhabitants foundation for the estimates. These stay the inhabitants in non-public households in 2020-21, as estimated by ONS. ONS has not adjusted these figures within the gentle of COVID-19. Extra info on mid-year estimates of inhabitants will be discovered on the ONS web site.

Grossing-up is the time period often given to the method of making use of elements to pattern knowledge in order that they yield estimates of the general inhabitants. Estimates within the PI publication incorporate the 2011 Census based mostly mid-year inhabitants estimates into the grossing regime from FYE 2013 onwards. A constant again collection has been produced from FYE 2003 to FYE 2012.

Along with the usage of 2011 Census knowledge, quite a few minor methodological modifications have additionally been carried out within the FRS dataset. These methodological modifications have been made on the advice of the ONS Methodological Advisory Service throughout an Preliminary Assessment of the FRS weighting scheme. A report of the modifications made to the grossing regime is obtainable.

A software program bundle known as CALMAR, offered by the French Nationwide Statistics Institute, is used to reconcile management variables at totally different ranges and estimate their joint inhabitants. This software program makes the ultimate weighted pattern distributions match the inhabitants distributions by a course of often called calibration weighting. It ought to be famous that if a couple of instances are related to very small or very massive grossing elements, grossed estimates may have comparatively extensive confidence intervals.

D. Adjusting for inflation

The PI Sequence makes use of uprating elements to regulate for inflation, by bringing values from earlier years into present value phrases for the newest yr of the publication. As suggested in a Statistical Discover printed in Might 2016, from FYE 2015 PI made a methodological change to make use of variants of the Shopper Costs Index (CPI) when adjusting for inflation. Previous to the FYE 2015 PI publication, variants of the Retail Costs Index (RPI) have been used to regulate for inflation.

Learn extra info within the FYE 2015 PI publication’s background info and methodology.

E. Adjustment for people with very excessive incomes

An adjustment is made to pattern instances on the prime of the earnings distribution to appropriate for volatility within the highest incomes captured within the survey. This adjustment makes use of knowledge from HM Income and Customs Survey of Private Incomes (SPI) to manage the numbers and earnings ranges of the ‘very wealthy’ whereas retaining the FRS knowledge on the traits of the households. For FYE 2021, pensioners in Nice Britain are topic to the SPI adjustment if their gross earnings exceeded £85,600 per yr (£68,800 in Northern Eire). Working-age adults (together with the working-age companions of pensioners) are topic to the SPI adjustment if their gross earnings exceeded £289,900 per yr (£153,800 per yr in Northern Eire). For extra particulars on the SPI adjustment see the HBAI High quality and Methodology Data Report.

F. Destructive incomes

Destructive incomes should not considered indicative of requirements of dwelling. Pensioner models with detrimental internet earnings Earlier than Housing Prices have the gross earnings parts of earnings, and their internet earnings Earlier than Housing Prices, set to zero. Web earnings After Housing Prices is ready to zero minus housing prices, and so for a small variety of instances will likely be detrimental. See the PI methodological paper quantity two for extra info on detrimental incomes.

G. Output requirements for ethnic teams

The PI FYE 2020 publication has adopted the most recent harmonised output requirements for ethnic teams for the UK, nevertheless, ‘combined’ and ‘different’ ethnic teams have been merged collectively because of small pattern sizes. The newest harmonised requirements have been printed in August 2011 and canopy the ethnic group query in England, Wales, Scotland, and Northern Eire. Additionally they cowl harmonised knowledge presentation for ethnic group outputs. The requirements have been up to date in February 2013 detailing how Gypsy, Traveller, and Irish Traveller ought to be recorded within the outputs, because of variations throughout the UK.

We have now amended our reporting of ethnic background in FYE2021 to replicate absolutely that this ethnicity is self-declared. Illustration charges are actually calculated from identified declarations solely and exclude ‘select to not declare’ and ‘unknown’. For the FRS and PI this has had a minimal impact on reporting.

For additional particulars please see the Ethnicity harmonised customary.

H. Additional info

A set of methodological papers on the PI collection can be found which embrace papers on detrimental incomes, private pension earnings, and definitions of pensioner models.

3. Reliability of estimates

The achieved FRS pattern this yr is roughly half the standard variety of households. While this nonetheless represents a big pattern, confidence intervals are wider than in a standard FRS yr, and this must be borne in thoughts when decoding the estimates on this publication.

Given the decreased pattern dimension in FYE 2021, confidence intervals round the primary estimates are on common 69% wider than in earlier years, that means that the diploma of change within the estimates wanted to be bigger earlier than we will be assured it’s statistically important.

The figures on this publication come from the FRS. Like all surveys, it gathers info from a pattern reasonably than from the entire inhabitants. The dimensions of the pattern and the best way wherein the pattern is chosen is rigorously designed to make sure that it’s consultant of the UK as complete, while making an allowance for sensible concerns like time and price constraints. Survey outcomes are at all times estimates, not exact figures. Which means that they’re topic to a degree of uncertainty which might have an effect on how modifications, particularly over the brief time period, ought to be interpreted.

A. Estimating and reporting uncertainty

Two totally different random samples from one inhabitants, for instance the UK, are unlikely to present precisely the identical survey outcomes, that are prone to differ once more from the outcomes that will be obtained if the entire inhabitants was surveyed. This degree of uncertainty round a survey estimate will be calculated and is usually known as sampling error.

Along with sampling error, the PI estimates will also be affected by different non-sampling errors. A few of these are:

reporting errors: Imperfect recall and respondents selecting to intentionally give incorrect solutions are examples of reporting error. If these errors are systematic, they could result in bias within the survey estimates

under-reporting: The FRS info on advantages depends on the respondent with the ability to precisely report the quantity of profit they obtain. This reliance results in under-reporting in receipt for a lot of advantages. The profit caseload undercounts for Carer’s Allowance, Employment and Assist Allowance (ESA) and Private Independence Cost (PIP) have been smaller in 2020-21 than in 2019-20. The distinction in reported caseload varies by profit, with State Pension and Incapacity Dwelling Allowance (DLA) each exhibiting a distinction of lower than 5 per cent in 2020-21. It is usually thought that family surveys underestimate earnings from each self-employment and investments so these figures ought to be handled with warning. The under-reporting of earnings from investments is especially prone to have an effect on the estimates for pensioners

misreporting: The kind of earnings obtained is self-reported by survey respondents and might consequently be misreported. For instance, some survey respondents might not be capable to distinguish between the State Pension and Pension Credit score as a result of these advantages will be paid collectively

systematic bias: This arises within the pattern if sure teams are much less probably to answer a survey than others. That is corrected to some extent within the FRS by grossing to match subgroups of the inhabitants by age, intercourse, household standing, tenure, council tax band, and broad geographic area. Nonetheless, it’s troublesome to account for all attainable bias, so some outcomes should still be affected

We will calculate the extent of uncertainty round a survey estimate by exploring how that estimate would change if we have been to attract many survey samples for a similar time interval, as a substitute of only one.

B. Measuring the scale of sampling error

The method above permits us to outline a spread across the estimate (often called a “confidence interval”) and to state how probably it’s that the actual worth that the survey is attempting to measure lies inside that vary. Confidence intervals are used as a information to the scale of sampling error. These are sometimes arrange in order that we will be 95% certain that the true worth lies throughout the vary, wherein case this vary is known as a “95% confidence interval”. A wider confidence interval signifies a larger uncertainty across the estimate. Usually, a smaller pattern dimension will result in estimates which have a wider confidence interval. It is because a smaller pattern is much less probably than a bigger pattern to replicate the traits of the whole inhabitants and subsequently there will likely be extra uncertainty across the estimate derived from the pattern.

Statistical significance: Some modifications in estimates between years would be the results of totally different samples being chosen, while different modifications will replicate underlying modifications in earnings throughout the inhabitants. Confidence intervals can be utilized to determine modifications within the knowledge which are statistically important; that’s, they’re unlikely to have occurred by likelihood because of a selected pattern being chosen. Confidence intervals may give a spread across the distinction in a consequence from one yr to the following. If the vary doesn’t embrace zero it signifies this variation is unlikely to be the results of likelihood.

Working with unsure estimates: Some modifications between years will likely be small in relation to sampling variation and different sources of error and might not be statistically important. That is related for explicit sub-groups, as these may have smaller pattern sizes than the general survey pattern dimension. For these sub-groups you will need to take a look at long-term traits.

4. Estimating and decoding uncertainty within the PI report

A. Calculating uncertainty within the PI report

Because the FYE 2014 publication, confidence intervals have been calculated utilizing a bootstrapping strategy, utilizing the statistical bundle SAS. This has allowed confidence intervals to be calculated for a wider vary of estimates.

Bootstrapping considers the design of the pattern. It replicates the sampling design of the survey and takes re-samples with substitute from the dataset, creating 500 new samples of the dataset. Every new pattern is totally different and comprises a number of copies of some survey observations and none of some others. Exploring the vary of leads to these samples permits us to generate confidence intervals across the consequence obtained within the authentic pattern.

From the FYE 2016 publication and onwards, new bootstrapping methodology has offered an improved measure of uncertainty round key PI estimates by creating resamples of the HBAI dataset by simulating stratified, cluster sampling for GB and stratified sampling for NI. It additionally creates a novel set of grossing elements for every resample utilizing the HBAI grossing course of to gross the GB and NI resamples to the UK inhabitants. For a extra technical information to the strategy used to generate confidence intervals on this report, please see the statistical discover or the HBAI High quality and Methodology Data Report.

B. Decoding estimates of uncertainty in PI

Desk M1.1 offers confidence intervals for key estimates of pensioners’ incomes in FYE 2020. For instance, in FYE 2020, weekly gross earnings for all pensioner models is estimated to be £554. We will be 95% assured that the true worth of gross earnings per week, if we have been to take a census of the inhabitants, would lie between £538 and £568.

The desk reveals that, whereas there’s a diploma of uncertainty concerning the estimates, it doesn’t have an effect on the broad conclusions drawn, such because the relative significance of several types of earnings, or the truth that single males on common had larger incomes than single ladies.

When evaluating two or extra estimates, we should issue within the uncertainty surrounding every of the estimates. Desk M1.2 reveals the expansion in sources of earnings between FYE 2011 and FYE 2021, and FYE 2020 and FYE 2021.

Statistically important outcomes (on the 95% confidence degree) are marked with an asterisk (*). As will be seen, the boldness intervals across the estimates of assorted totally different development charges between FYE 2020 and FYE 2021 typically embrace zero. That is significantly true for smaller parts of earnings. Which means that we can’t be assured that the expansion price is totally different from zero, and therefore the change shouldn’t be statistically important.

Over brief time intervals, it’s unlikely that an earnings measure will change dramatically, so the uncertainty is prone to be massive in contrast with the change itself.

Customers are suggested to attract conclusions from long run traits reasonably than yr on yr modifications.

Even some longer-term modifications must be interpreted with care. For earnings sources the place the quantity obtained per week varies tremendously between pensioner models, equivalent to funding earnings, even long-term comparisons might not be statistically important. For instance, earnings from investments has elevated by 13% for single pensioners from FYE 2010 to FYE 2020, however this improve shouldn’t be statistically important (see Desk M1.2).

For extra details about uncertainty round FRS derived estimates see the 2014 uncertainty in FRS based mostly evaluation report. There may be additionally the 2017 statistical discover for the change carried out from FYE 2016 knowledge onwards.

Desk M1.1: Uncertainty surrounding estimates within the Pensioners’ Incomes Sequence FYE 2020


95% confidence interval

£ p/w
Interval width
Relative width
Interval vary
All pensioner models
Gross earnings
555 to 600
of which
Profit earnings
244 to 258
Occupational pension earnings
168 to 203
Private pension earnings
14 to 25
Funding earnings
36 to 55
Earnings earnings
56 to 82
Different earnings
2 to three
Web earnings BHC


468 to 503
370 to 410
Web earnings AHC


434 to 470
345 to 379
Pensioner {couples}
Median internet earnings BHC

512 to 567

Median internet earnings AHC

480 to 536

Single pensioners
Median internet earnings BHC

263 to 304

Median internet earnings AHC

226 to 261

Single male pensioners
Median internet earnings BHC

284 to 344

Median internet earnings AHC

215 to 293

Single feminine pensioners
Median internet earnings BHC

251 to 300

Median internet earnings AHC

217 to 262

Just lately reached SPa pensioner models
Median internet earnings BHC

386 to 475

Median internet earnings AHC

327 to 425

Not just lately reached SPa pensioner models
Median internet earnings BHC

355 to 401

Median internet earnings AHC

330 to 371

Pensioner models the place the pinnacle is underneath 75
Median internet earnings BHC

393 to 459

Median internet earnings AHC

352 to 421

Pensioner models the place the pinnacle is 75 or over
Median internet earnings BHC

342 to 384

Median internet earnings AHC

301 to 348

The interval widths are calculated on unrounded numbers and subsequently might not match the interval vary.

Desk M1.2 Development in common incomes of pensioner models, FYE 2011 to FYE 2021, and FYE 2020 to FYE 2021

FYE 2011
FYE 2020
FYE 2021
% development FYE 2011 to FYE 2021
% development FYE 2020 to FYE 2021
95% confidence interval FYE 2011 to FYE 2021
95% confidence interval FYE 2020 to FYE 2021
All pensioner models
Gross earnings

2% to 13%
-1% to 9%

of which
Profit earnings
5% to 12%
-1% to six%
Occupational pension earnings
20% to 50%
-2% to 23%
Private pension earnings
-35% to 36%
-28% to 53%
Funding earnings
-12% to 42%
-26% to twenty%
Earnings earnings
-53% to -21%
-31% to 14%
Different earnings
-67% to -25%
-58% to -7%
Web earnings BHC


4% to 14%
-1% to eight%
4% to 17%
0% to 12%
Web earnings AHC


4% to fifteen%
4% to fifteen%
9% to 21%
3% to fifteen%
Pensioner {couples}
Gross earnings
-1% to fifteen%
-4% to 9%
of which
Profit earnings
9% to 18%
-3% to six%
Occupational pension earnings
14% to 55%
-8% to 21%
Private pension earnings
-49% to 35%
-30% to 55%
Funding earnings
-23% to 59%
-39% to 30%
Earnings earnings
-57% to -21%
-40% to 14%
Different earnings
-75% to -14%
-68% to 2%
Web earnings BHC


3% to 17%
-3% to 9%
7% to twenty%
-1% to 13%
Web earnings AHC


3% to 18%
-3% to 9%
6% to 21%
-2% to 12%
Single pensioners
Gross earnings
-2% to 18%
-8% to 14%
of which
Profit earnings
-2% to eight%
-3% to eight%
Occupational pension earnings
8% to 57%
-15% to 31%
Private pension earnings
-82% to 79%
-109% to 76%
Funding earnings
-57% to 59%
-86% to 40%
Earnings earnings
-78% to 22%
-76% to 37%
Different earnings
-80% to -23%
-77% to 2%
Web earnings BHC


-1% to 16%
-7% to 12%
-3% to 14%
-4% to 13%
Web earnings AHC


-1% to 18%
-7% to 13%
-1% to 17%
-4% to 14%

Outcomes which are statistically important are denoted with an asterisk (*).
Confidence intervals are calculated on unrounded numbers. Modifications are indicated as statistically important if the boldness interval earlier than rounding doesn’t embrace zero.
The share modifications are calculated on unrounded numbers and subsequently might not match these calculated for the rounded numbers proven within the desk.

5. Households Under Common Revenue (HBAI) and the Pensioners’ Incomes (PI) Sequence

Whereas the HBAI knowledge for FYE 2021 has undergone intensive high quality assurance previous to publication, we advocate that customers train extra warning when utilizing the info for FYE 2021, significantly when making comparisons with earlier years. That is particularly really useful when decoding bigger modifications noticed in FYE 2021.

The technical report printed by the Households Under Common Revenue (HBAI) staff explains the coronavirus impacts in additional element which ought to be thought-about alongside interpretation of Pensioners’ Incomes (PI) Sequence statistics

Two of the tables within the PI publication desk pack (Tables 4.6 and 4.7) present info on the place of pensioners throughout the total earnings distribution. These tables outline pensioners as adults in households the place not less than one member is over SPa, in keeping with the remainder of the PI publication. That is totally different to the definition utilized in HBAI which defines pensioners as these over SPa.

Outcomes from HBAI shouldn’t be immediately in comparison with these from PI. The principle variations between HBAI and PI strategies of study are:

Revenue parts: The PI outcomes embrace evaluation of the parts of pensioner unit earnings (profit earnings, occupational pension earnings, and so forth.). HBAI, with its broader span of pursuits, doesn’t current detailed evaluation of this type.

Family or pensioner unit: The PI collection is usually involved with money incomes immediately obtained by pensioners. It measures the earnings of pensioner profit models solely (plus earnings for any dependent kids throughout the pensioner unit), ignoring earnings obtained by some other members of the family. HBAI makes an attempt to measure materials dwelling requirements, so it consists of all of the earnings for the family wherein the pensioner lives; the underlying HBAI assumption being that the whole family earnings is shared amongst all family members.

Equivalisation: To permit comparability of dwelling requirements of various households, the HBAI ‘equivalises’ family earnings; that’s, adjusts it to take account of family dimension and composition. One of many essential features of the PI collection is to supply info on the earnings of pensioner models in financial phrases, break up by sources of earnings. This could solely be performed utilizing unequivalised earnings. Equivalisation shouldn’t be essential for many outcomes, that are offered individually for pensioner {couples} and single pensioners. To keep away from pointless complexity, the primary PI outcomes are offered in financial phrases, at fixed FYE 2021 costs, reasonably than equivalised earnings at FYE 2021 costs. PI does nevertheless use equivalised earnings to analyse pensioners’ place within the total inhabitants earnings distribution.

Equivalisation Scales: HBAI traditionally used the McClements equivalisation scale. Following consumer session, the FYE 2006 version of HBAI and subsequent HBAI publications have used Modified OECD equivalisation scales. The identical change has been made to the related knowledge in PI for the reason that FYE 2006 version of the PI collection. Data on the impact of the change will be present in Appendix B of the FYE 2007 version of the PI collection.

6. Glossary

This glossary provides a quick clarification for every of the important thing phrases used within the PI Sequence. Additional particulars on these definitions, together with full derivations of variables, can be found on request from the DWP PI Sequence Group at pensioners-incomes@dwp.gov.uk

A glossary of earnings and earnings phrases produced by the ONS can also be accessible.


All people who’re aged 16 and over are categorized as an grownup, until the person is outlined as a dependent little one (see Baby). All adults within the family are interviewed as a part of the FRS.


Respondent’s age finally birthday (on the time of the interview).

Computerized Enrolment

Computerized enrolment requires all employers to enrol their eligible employees right into a office pension scheme if they aren’t already in a single. The staged timetable started in October 2012 for bigger companies and accomplished for all employers in 2018. To protect particular person duty for the choice to save lots of, employees can decide out of the scheme. To be eligible for computerized enrolment, the jobholder should be not less than 22 years outdated, underneath SPa, earn above the earnings set off for computerized enrolment, and work or often work within the UK. Learn extra info see on computerized enrolment.

Profit Unit or Household

A profit unit might encompass: a single grownup, or a married or cohabiting couple, plus any dependent kids. Similar-sex companions have been included in the identical profit unit since January 2006. The place a complete for a profit unit is offered (equivalent to whole profit unit earnings) this consists of each earnings from adults plus any earnings from dependent kids. There are numerous kinds of profit unit:

pensioner couple: Profit models the place both grownup within the couple is over SPa

pensioner couple, married or civil partnered: Profit models headed by a pair wherein not less than one companion is over SPa and the couple are both married or in a civil partnership

pensioner couple, cohabiting: Profit models headed by a pair wherein not less than one companion is over SPa and the couple are neither married nor in a civil partnership

single male pensioner: Profit models headed by a single male grownup over SPa

single feminine pensioner: Profit models headed by a single feminine grownup over SPa

It ought to be famous that ‘profit unit’ is used all through the report as an outline of teams of people no matter whether or not they’re in receipt of any state assist.


Monetary assist from the Authorities. Most of those advantages are administered by DWP. The main exceptions are Housing Profit and Council Tax Discount, that are administered by native authorities. Baby Profit is run by HMRC, who additionally administer Tax Credit. These should not handled as advantages, however each Tax Credit and advantages are included within the time period State Assist. Tax Credit will in the end get replaced by Common Credit score.

Advantages are sometimes divided into income-related advantages and non-income-related advantages. In assessing entitlement to the previous, the claimant’s earnings and financial savings will likely be checked in opposition to the foundations of the profit. In distinction, eligibility for non-income-related advantages is as a substitute depending on the claimant’s circumstances (a current bereavement, for instance), reasonably than their earnings and financial savings. An inventory of the primary state advantages divided into these two classes is beneath.

Incapacity-related advantages is the time period used to explain all advantages paid on grounds of incapacity. These are: Incapacity Dwelling Allowance, Private Independence Funds, Armed Forces Compensation Scheme, Attendance Allowance, Industrial Accidents Disablement Profit and any remaining Extreme Disablement Allowance instances. Earlier than FYE 2009, Incapacity Profit was additionally on this group. Numbers on Incapacity Profit and Extreme Disablement Allowance advantages have decreased over time, as each have been changed by Employment and Assist Allowance from October 2008.

Revenue-related advantages
Non-income-related advantages
Council Tax Discount
Armed Forces Compensation Scheme
Employment and Assist Allowance (income-related ingredient)
Attendance Allowance
Prolonged Funds (Council Tax Discount and Housing Profit)
Bereavement or Widowed Mum or dad’s Allowance
Housing Profit
Bereavement Assist Cost
Revenue Assist
Carer’s Allowance
Jobseeker’s Allowance (income-based ingredient)
Baby Profit
Northern Eire Different Fee Rebate
Incapacity Dwelling Allowance (each mobility and care parts)
Northern Eire Fee Rebate by power environment friendly properties
Employment and Assist Allowance (contributory ingredient)
Northern Eire Fee Aid
Guardian’s Allowance
Pension Credit score
Industrial Accidents Disablement Profit
Charges Rebate
Jobseeker’s Allowance (contributory ingredient)
Social Fund – Funeral Grant
Maternity Allowance
Positive Begin Maternity Grant (Finest Begin Grant in Scotland)
Northern Eire Incapacity Fee Rebate
Common Credit score
Northern Eire Lone Pensioner Fee Rebate
Private Independence Cost (Day by day Dwelling and Mobility parts)
Extreme Disablement Allowance
State Pension
Statutory Maternity/Paternity/Adoption Pay
Statutory Sick Pay
Winter Gas Funds


A dependent little one is outlined as a person aged underneath 16. An individual can also be outlined as a toddler if they’re 16 to 19 years outdated and they’re:

not married nor in a civil partnership nor dwelling with a companion

dwelling with mother and father or a accountable grownup

in full-time non-advanced schooling or in unwaged authorities coaching

Confidence interval

A measure of sampling error. A confidence interval is a spread round an estimate which states how probably it’s that the actual worth that the survey is attempting to measure lies inside that vary. A wider confidence interval signifies a larger uncertainty across the estimate. Usually, a smaller pattern dimension will result in estimates which have a wider confidence interval than estimates from bigger pattern sizes. It is because a smaller pattern is much less probably than a bigger pattern to replicate the traits of the whole inhabitants and subsequently there will likely be extra uncertainty across the estimate derived from the pattern. Be aware {that a} confidence interval ignores any systematic errors which can be current within the survey and evaluation processes.

Council Tax

The tax relies on which, of a set of bands, a property’s worth falls into. Its headline price relies on two adults per family.

Learn extra info on council tax.


Revenue measures utilized in HBAI think about variations within the dimension and composition of the households wherein individuals reside. This course of is named equivalisation. Equivalisation displays the truth that a household of a number of individuals wants the next earnings than a single particular person to ensure that them to get pleasure from a comparable way of life. Equivalence scales conventionally take a pair with no kids because the reference level. The method then will increase comparatively the earnings of single individual households (since their incomes are divided by a price lower than one) and decreased comparatively the incomes of households with three or extra individuals, which have an equivalence worth of larger than one.

We don’t use equivalisation in PI, besides in part 7 of the primary publication and when evaluating to the general distribution in Tables 4.6 and 4.7 of the desk pack.

Ethnic group

The ethnic group to which respondents think about that they belong. The FRS questions are in step with Nationwide Statistics’ harmonisation steerage. The classes are:

For Northern Eire, ‘Irish Traveller’ is included in ‘Different ethnic group’. For England, Wales and Scotland, ‘Gypsy or Irish Traveller’ is included in ‘White’.

‘Arab’ has been included in ‘Different ethnic group’ because of small pattern sizes.

Ethnic background is self-declared; knowledge is obtainable for identified declarations and excludes ‘select to not declare’ and ‘unknown’.

Household Sources Survey (FRS)

The FRS is without doubt one of the largest cross-sectional family surveys within the nation surveying usually round 20,000 non-public households throughout all ages previous to FYE 2021. Round 10,000 households have been surveyed in FYE 2021. Previous to FYE 2003 the survey lined Nice Britain; from FYE 2003 the survey was prolonged to cowl the UK.

Gross earnings

Whole earnings a pensioner receives from all sources earlier than any outgoings, tax or housing prices.

Head of profit unit

If the Family Reference Particular person doesn’t belong to the profit unit, then the Head of profit unit is just the primary individual from that profit unit, within the order they have been named within the interview. If the Family Reference Particular person does belong to the profit unit, they’re additionally the Head of that profit unit.


One individual dwelling alone or a bunch of individuals (not essentially associated) dwelling on the identical handle who share cooking amenities and share a lounge or sitting room or eating space. A family consists of a number of profit models.

Family Reference Particular person (HRP)

The best earnings individual in a family.

in a single-adult family, the HRP is just the only householder (i.e. the individual in whose identify the lodging is owned or rented)

if there are two or extra house owners, the HRP is the householder with the very best private earnings, taking all sources of earnings under consideration

if there are two or extra house owners who’ve the identical earnings, the HRP is the elder

Earlier than April 2001, the Family Reference Particular person (HRP) was often called the Head of Family. The place we consult with ‘Head’ in tables referring to households, that is the HRP. The Head of profit unit won’t essentially be the HRP (see Head of profit unit).

Housing prices

Housing prices are made up of: hire (gross of housing profit), water charges, group water expenses and council water expenses, mortgage curiosity funds (internet of tax reduction), structural insurance coverage premiums (for proprietor occupiers); and floor hire and repair expenses.

Web incomes within the PI report are offered both on a BHC or AHC foundation, the definitions of that are:

Capital mortgage repayments should not deducted as a Housing Value as that is considered an asset being accrued and never a value.

In a multi-benefit unit family, housing prices are attributed to the primary profit unit (the profit unit with the Family Reference Particular person). Which means that for a minority of pensioner models, housing prices won’t be attributed to them.

Revenue distribution

The unfold of incomes throughout the inhabitants.

Marital standing

That is the individual’s marital standing:

married or Civil partnership: at the moment married or in a civil partnership, and never separated from partner (excludes short-term absences)

cohabiting: not married nor in a civil partnership, however dwelling as a pair

single: shouldn’t be at the moment cohabiting and isn’t married nor in a civil partnership

Blended-age pensioner {couples}

A pair the place one member is above SPa and the opposite is beneath. Utilized in comparability with {couples} the place each members are over SPa.

Web earnings

Web earnings is gross earnings with direct taxes together with Council Tax funds deducted. Web earnings could also be offered on a Earlier than Housing Prices or After Housing Prices foundation. See ‘Housing prices’ for extra element.

Occupational pension

An occupational pension scheme is an association an employer makes to present their workers a pension once they retire. Staff might turn into a member of an employer’s pension scheme on a voluntary foundation. Till 6 April 2016, Outlined Profit occupational pension schemes could possibly be contracted into or out of the Extra State Pension. This was abolished with the introduction of the New State Pension. The contracting out of Outlined Contribution occupational pension schemes was abolished in 2012.

Pensioner profit unit

Profit models who’re a pensioner couple, single male pensioner, or single feminine pensioner. Pensioner profit models can also embrace any dependent kids, however that is unusual. In FYE 2021, lower than half a per cent of pensioner models included dependent kids.

Pension Credit score

An income-related profit made up of Assure Credit score and Financial savings Credit score. Assure credit score tops up the claimant’s earnings to a assured degree. Financial savings Credit score is an additional quantity for individuals who have made provision for his or her retirement above a sure threshold. Financial savings Credit score was abolished for brand spanking new claimants on 6 April 2016, so most individuals who reached SPa after 6 April 2016 should not eligible for Financial savings Credit score.

Private pension

A pension offered by a contract between a person and the pension supplier. The pension which is produced will likely be based mostly upon the extent of contributions, funding returns and annuity charges. A private pension will be both employer offered or privately bought. Totally different types of private pension embrace:

Group Private Pension: Earlier than computerized enrolment, some employers who didn’t provide an occupational pension scheme might have organized for a pension supplier to supply their workers a private pension as a substitute. The employer might have negotiated particular phrases with the supplier which means the administration expenses are decrease than these for particular person private pensions. Though they’re typically known as firm pensions, they aren’t run by employers and shouldn’t be confused with occupational pensions, which have totally different tax, profit, and contribution guidelines. Be aware that some corporations should still provide Group Private Pensions along with their occupational pensions

Group Stakeholder Pension: As with Group Private Pensions, an employer could make an association with a pension supplier and provide their workers a Group Stakeholder Pension (see Stakeholder Pension)

Stakeholder Pension: Allow these with out earnings, equivalent to non-earning companions, carers, pensioners and college students, to pay right into a pension scheme. Nearly anyone as much as the age of 75 might take out a stakeholder pension and it isn’t essential to make common contributions

Learn extra info on private pensions.

Non-public pension

Non-public pensions embrace occupational pensions (often known as Employer-Sponsored pensions) and Private pensions (together with Stakeholder pensions). Individuals can have a number of totally different non-public pensions without delay. In earlier years solely one in every of these pensions could possibly be contracted out. The contracting out of Outlined Profit occupational schemes was abolished in April 2016 with the introduction of the New State Pension. The contracting out of Outlined Contribution pension schemes was abolished in 2012.

Just lately reached State Pension age

A pensioner is classed as having just lately reached State Pension age (SPa) if the pinnacle of the family is lower than 5 years older than SPa on the time they’re interviewed. As SPa is rising (see State Pension age beneath), the age a pensioner should be to be thought-about having just lately reached SPa has additionally risen.

Pensioner models who just lately reached State Pension age are included within the ‘Below 75’ age group.

Earlier than FYE 2019, this class was known as “just lately retired”. The identify was amended to higher replicate that the class is outlined by State Pension age reasonably than retirement standing.


Regional classifications are based mostly on the usual statistical geography of UK Areas, as outlined by ONS: 9 in England, and a single area for every of Wales, Scotland and Northern Eire. Tables may also present statistics for the UK, Nice Britain, and England as a complete.

Learn extra info on geographical phrases utilized in official statistics.

Disaggregation by geographical areas is offered as three-year averages. This presentation has been used as single-year regional estimates are thought-about too unstable. Estimates for the UK, nevertheless, are proven as single-year estimates for the most recent accessible yr. Though the FRS pattern is massive sufficient to permit some evaluation to be carried out at a regional degree, it ought to be famous that no adjustment has been made for regional variations in the price of dwelling, as the required knowledge should not accessible.

Sampling error

The uncertainty within the estimates which arises from taking a random pattern of the family inhabitants. The probably dimension of this error for a selected statistic will be recognized and expressed as a confidence interval.

Sources of earnings

profit earnings: together with State Pension, Revenue-related advantages and Incapacity-related advantages, in addition to different kinds of advantages equivalent to Winter Gas Funds and Carers’ Allowance

occupational pension earnings: together with worker pensions related to an employer and office

private pension earnings: together with private pensions, annuities purchased with lump sums from private pensions, commerce union and pleasant society pensions

funding earnings: together with curiosity from Particular person Financial savings Accounts (ISAs) and different financial savings accounts, unit trusts, bonds, shares and shares

earnings earnings, together with:

wages and salaries: for a respondent at the moment working as an worker, earnings from wages and salaries is the same as: gross pay earlier than any deductions, much less any refunds of earnings tax, any motoring and mileage bills, any refunds for objects of family expenditure and any Statutory Sick Pay or Statutory Maternity Pay, plus bonuses obtained over the past 12 months (transformed to a weekly quantity) and any kids’s earnings from part-time jobs. Wages are handled as earnings earnings reasonably than state assist, regardless of any assist funds from Coronavirus Job Retention Scheme (CJRS) that the respondent’s employer was receiving in respect of their employment

self-employed earnings: the whole quantity of earnings obtained from self-employment gross of tax and nationwide insurance coverage funds, based mostly on earnings (the place the person considers themselves as operating a enterprise) or on estimated earnings or drawings in any other case. Excludes any earnings because of companions within the enterprise. Any losses are recorded as such

different earnings: advantages from pleasant societies, earnings obtained for or dependent kids, upkeep funds and free TV licences for these aged 75 and over

Revenue quantities don’t embrace grants obtained from the Self-Employed Revenue Assist Scheme (SEISS).

State Pension

The state pension is a fee made to qualifying people who’ve reached the State Pension age (SPa). A brand new single-tier State Pension launched on 6 April 2016 for individuals who attain SPa on or after April 2016, to switch the earlier system. This consolidated the essential State Pension and Extra State Pension into one single quantity.

Individuals who reached SPa earlier than 6 April 2016 proceed to obtain the essential State Pension and Extra State Pension if eligible. Learn extra info on the State Pension.

State Pension age (SPa)

SPa is the earliest age you can begin receiving your State Pension. For FYE 2020 knowledge, people are outlined to be of SPa based mostly on their date of start and the date of interview. Since 6 April 2010, the SPa has been steadily rising. The FRS knowledge contained on this report have been collected all through the FYE 2021, throughout which the SPa for pensioners elevated from over 65 years and eight months to over 66 years by October 2020.

A breakdown of the will increase will be seen within the State Pension age timetables and particulars of deliberate modifications to SPa will be discovered on-line. Learn additional steerage on calculating State Pension eligibility age.

State assist

A person is in receipt of state assist in the event that they obtain a number of Advantages, or are being paid Tax Credit.

Tax Credit

Working Tax Credit and Baby Tax Credit are paid by HMRC. Tax Credit are being phased out, as they’re changed by Common Credit score.

Learn extra info on tax credit.

Triple Lock

The essential State Pension and the brand new State Pension will increase yearly by whichever is the very best of the next:

In FYE 2021, the rise was 2.5%.


Adults (see “Grownup” and “Baby”) underneath State Pension age.

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