How improved data affects the Scottish child poverty reduction targets

The Department of Work and Pensions (DWP) has improved the income data we use to measure poverty, including 3 of the child poverty reduction targets unanimously set by the Scottish Parliament. For the first time, with the 2024/25 data, the DWP has linked administrative data about the social security benefits that people receive, to their responses in the Family Resources Survey. They have also looked back and retrospectively linked people’s DWP benefit records (but not Scottish Government benefits) from 2021/22.

While this helps us to get a better picture of people’s incomes in the UK, it means that there is a break in the series so we can’t compare the data from before this change in method, to after. This restricts what we can and can’t say about incomes and poverty, particularly if we want to talk about change over time. While this changes what we can say about poverty across the UK, this has important and specific implications in Scotland as we approach the 2026 Scottish Parliament elections.

Even with these improvements, too many children in Scotland are trapped in poverty. The new data shows:

• 21% of children were growing up in poverty in 2022-25
• child poverty rates in Scotland have fallen slightly since last year (2021-24)
• improved data suggests that Scotland met the interim Child Poverty Reduction Target of 18% in 2023/24. However, given the high variability in the single-year figures, we should treat this with significant caution, especially given that the single-year figure for 2024/25 is back above the target at 21% (underlining why using 3-year averages is better).

Changes in how incomes are calculated

We have written a detailed explainer that goes step-by-step through the changes to how incomes are calculated using the new data collection method. This is focused on the UK but importantly, the changes apply to the Scottish sub-sample. This section will summarise these changes, but you should consult the other explainer if you want to know more about how the changes have impacted the accuracy of the data, the median income, poverty line and poverty rates.

How has the data changed?

Until now, respondents to the Family Resources Survey (FRS) were asked whether they received any social security benefits and if so, how much they received. The new method means that the DWP don’t have to rely on people reporting that they receive a UK-wide benefit, or the how much they receive. Instead, with consent, they link their records directly to the people who took part in the survey. This is much more accurate and removes the undercounting of UK-wide benefit receipt and amount in the survey data. This does not reflect a change in the actual take-up of benefits but in how well it’s captured in this survey.

This (2024/25) is the first year of data using this method, but the DWP have also looked back and retrospectively linked people’s DWP benefit records from 2021/22. There are also plans to release 2018/19 to 2020/21 linked data this summer. With the change in data collection we now have 2 time series in Scotland, the old data (1994-97 to 2021-24) and the new data (2021-24 and 2022-25). These 2 series are not directly comparable and result in a break in the series.

To add further complication to an already large and complicated change to the data, in Scotland, some benefits have been devolved to the Scottish Government. This has resulted in disability and carer benefits being devolved, as well as the introduction of new benefits, primarily the Scottish Child Payment. These are now provided to people in Scotland via Social Security Scotland, but the DWP have not yet linked this data for Scotland. This means:

• for households where someone is in receipt of Scottish disability benefits (Adult Disability Payment, Child Disability Payment or Pension Age Disability Benefit) the survey will continue to rely on the self-reporting of these benefits
• for households where someone is in receipt of Carers Support Payment, the survey will continue to rely on the self-reporting of this benefit
• Scottish Child Payment will continue to be imputed into the survey data by DWP. They are doing this by judging eligibility using other survey data, including the new linked UK-wide benefits data, rather than linking Scottish Child Payment data itself. 

This means that the accuracy and quality of the Scottish sample’s benefit data falls short of the rest of the UK. The value of Scottish disability benefits is significant, and linking data would have an impact on poverty rates in Scotland. However, as the majority of benefits, particularly to low-income households, will be linked via DWP administrative data, there is a clear improvement in the accuracy of the data in Scotland.

Until administrative data on these Social Security Scotland benefits are also linked, we will not have a full picture on benefit income in Scotland. Additionally, variation in methodology between Scotland and the rest of the UK is problematic, particularly in the lead-up to the election, and in light of the legally binding child poverty reduction targets. We need DWP to prioritise linking these records next year for the HBAI year 2025/26 to have a comprehensive picture of poverty in Scotland.

Why does the poverty rate look different?

Lower-income households have been impacted more by this data improvement than higher-income households, because many social security benefits are means tested or more likely to be received by lower-income families. The change in method has resulted in a shift in the median income, the relative poverty line, and where households sit in the income distribution. For some households, having more accurate benefits data will have shifted their household income up enough to push them over the new poverty line, reducing the number of people recorded as in poverty in Scotland.

As well as having a bigger impact on the incomes and poverty rates of lower-income households, the data improvement might also impact various groups of the population differently. For example, households with children and pensioners are more likely to be in receipt of a low-income or other benefits meaning this change in data collection has impacted children more than working-age adults. Additionally, as some benefit income is not captured as accurately in Scotland, the difference between the old and new method may be smaller for households where someone is disabled than in the rest of the UK.

The break in the series has also led to a specific challenge in measuring absolute poverty, which is a measure used to tell us whether the incomes of poorer households are increasing faster than inflation. Absolute poverty compares people’s incomes to a fixed poverty line.

Previously, absolute poverty was based on an inflation-adjusted 2010/11 poverty line (set at 60% of median income after housing costs in 2010/11). But because there is no data using the new data collection method for 2010/11, we can no longer compare current incomes to those in 2010/11. Instead, DWP have decided to use the latest year, 2024/25, as the new poverty line that absolute poverty will be compared against from now onwards.

The change to the data collection method, the shift in the income distribution and poverty line, and the complete change of the absolute poverty measure, complicates how we report on poverty statistics and the targets, particularly if we want to make comparisons.

Talking about poverty in Scotland

The changes to the data impact how we can talk about and interpret poverty statistics across the UK, but it has some specific ramifications in Scotland due to the Scottish child poverty reduction targets as well as the upcoming Scottish Parliament elections. It’s important that people communicating about poverty in Scotland can use the new statistics accurately to hold political parties and government to account on their anti-poverty commitments.

The Scottish child poverty reduction targets

The Scottish child poverty reduction targets are a set of legally binding targets that were unanimously agreed upon by the Scottish Parliament and brought into legislation through the Child Poverty (Scotland) Act 2017. The Act includes 4 targets for child poverty in Scotland in 2030/31 and interim targets for 2023/24.

Three of these measures directly rely on the Family Resources survey while persistent poverty is calculated using the Understanding Society survey, which is unaffected by these changes. Additionally, as explained elsewhere, with the break in the series, it’s no longer possible to compare incomes collected in the new way with the poverty line in 2010/11 (collected the old way) to calculate the absolute poverty rate. This means that in 2024/25 there is not comparable data for measuring progress against this target. Therefore, the Scottish Government must act swiftly to introduce a new 2030/31 target for absolute poverty based on a year of the series that is available using the new data collection method.

What poverty rates look like now

Figure 1 illustrates the gap in the old and new series, and the impact of better data collection on the recorded poverty rate for all individuals, children, working-age adults and pensioners in Scotland. As mentioned above, this difference doesn’t represent a ‘fall’ in poverty, it represents a more accurate measurement of incomes. The amount of change in the poverty rate using the old and new data is greater for some groups compared to others. In part this is because households with children and pensioners are more likely to be in receipt of low-income benefits and other state support, which means their incomes are more likely to have changed due to the new data collection method.

What we can say about the child poverty reduction targets

Poverty rates from the old and new series are not directly comparable making it difficult to talk about overall changes since the introduction of the child poverty reduction targets until we have the new time series back to 2018-19 later this year. As there are only 2 data points available in Scotland (2021-24 and 2022-25) it is also not possible to describe any emerging trend. However, we can say how the headline numbers have changed in the latest three-year average in the new series compared to 2021-24.

Over 1 in 5 (21%) children in Scotland were in poverty in 2022-25, this is far too many children and well above the target of 1 in 10 by 2030. This is a very slight fall of less than one percentage point since 2021-24.

Using the new, more accurate data, we see that the Scottish Government did meet the interim child poverty reduction target of 18% in 2023/24. More volatile single-year values show that the child poverty rate using the new data collection method was 16% in 2023/24. However, using single-year values, the year before this it was 27% (2022/23) and the year after it was 21%, highlighting both the volatility of single-year values and that using 3-year averages is a more reliable measure. As a result, we should treat any conclusion that the interim targets were met with significant caution.

While we can see that there has been some progress on the targets in the latest year, we cannot report the change in poverty since the introduction of the targets at this time. With the addition of data from 2018/19 to 2020/21 to the new series later this year, we would have a fuller picture about progress then.

What we can say about the Scottish Child Payment

There have been challenges with capturing the Scottish Child Payment (SCP) using the old method, with DWP inputting the data themselves. Linking these records will mean that SCP is better reflected in the data from 2027.

When the additional data is released in summer 2026, we may be able see the impact of the payment on child poverty rates, as this will include a three-year period (2018-21) where the Scottish Child Payment was not yet rolled out. However, only after Social Security Scotland data is linked will we have a picture of the impact of the payment on poverty.

How this feels for people living on a low income

While the improved data collection method has resulted in different income distributions, poverty lines and poverty rates between 2021/22 and 2023/24, the reality for people living in poverty, and around the poverty line, remains one where people are struggling to make ends meet.

...when an unexpected demand hits... it feels like a direct threat to my safety and well-being. I feel like the system blames you for life being unpredictable...

Zain, Glasgow

Improving the data is a positive step in understanding poverty, but it is not an end in itself.

There are many other markers of how deep far too many people’s struggles are in our society at the moment. Whether it is the doubling of Trussell food bank demand since the Covid-19 pandemic, the outrageous levels of people in temporary accommodation, or our recent findings that over 1 in 5 people in Scotland are very economically insecure. These struggles are impacting on our politics, on our economy and most importantly on people’s lives – how we measure these things is important, but action to reverse them is significantly more so.

What can we say about poverty?

As we approach the last parliament before we need to reach the child poverty reduction targets it’s great to have better, more accurate data about the incomes of people in Scotland. It helps us to understand what drives poverty in Scotland and what policies are working. However, we urge DWP and the Scottish Government to work together to link the Social Security Scotland data so that we can get a full picture of social security in Scotland and across the UK.

Yet, the break in the series does, and will continue to, make it more complicated to talk about poverty. It means we can’t compare between the old and new series, making it hard to see change before and after the introduction of the Child Poverty (Scotland) Act. It could also lead to people using statistics in a misleading way in the run-up to the election.

We also expect further changes to the data in future releases. DWP will revise how it scales up (or grosses) to make the survey data better represent the UK population by using the 2021 and 2022 censuses for this in the 2027 publication. They are also working to bring in extra steps in this scaling-up to ensure the reporting of benefits in the survey matches totals on government administrative data systems.

We urge DWP to prioritise linking Scottish Social Security benefits for the 2027 publication, as well as make any other necessary changes to complete the improvements. We are about to enter the last parliamentary term before the final child poverty reduction targets need to be met, and need to quickly get an understanding of progress.

We have pulled together a quick set of prompts to help you to decide what you can and can’t say about poverty rates using the latest data.

What we can say and do:

• report on the latest years of data: over 1 in 5 (21%) children in Scotland were living in poverty in 2022-25
• compare the latest year of data with other years from the same series: poverty in Scotland has fallen since 2021-24
• make comparisons between groups using the new measure (or the old measure pre-2021/22): in 2022-25, 21% of children are in poverty and this is higher than the proportion of working-age adults in poverty (18%)
• report on meeting the interim targets: using the old, less accurate data, Scotland did not meet the relative poverty (AHC) interim target, but using the more accurate income data, the interim target was met — however, this judgement is heavily affected by the volatility of single-year measures
• be clear and cautious when using poverty analysis produced using HBAI prior to March 2026 — JRF (and likely other organisations using poverty statistics in their work) will not retrospectively change values from previous published work that reports on poverty from 2021/22 to 2023/24, this means that this work will be reporting on values created using the old data collection method and therefore, users will need to be cautious and clear if comparing between analysis/publications before and after March 2026
• even though the data is more accurate at capturing household incomes, with smaller sample sizes in Scotland, we still strongly recommend using 3-year average as practised by both DWP and the Scottish Government.

What we can’t say and do: 

• make an exact comparison between the old and new data: poverty has fallen from 24% in 1994-97 to 17% in 2022-25
• switch between which data collection series you are using without indicating this either visually (such as showing a break in the series on a chart) and/or in writing — you should stick to using the new, better-quality data, where possible
• suggest this implies improved take-up of benefits as this improvement means that the survey data better reflects the admin data, but the admin data has remained the same
• report the rate of absolute child poverty in relation to the absolute poverty target in the Child Poverty (Scotland) Act — the absolute poverty target compares incomes now to the poverty line in 2010, but with this change in how benefit income is collected, incomes in 2010 will no longer be comparable to data collected using the new method.

Note

The Scottish Government have included values back to 2020-23. However, this is not because DWP have linked data back to 2020/21 for Scotland, but because DWP have advised not to use 2020/21 data in three-year averages due to the impact of Covid-19 on data collection. This means they have used a two-year average between 2021/22 and 2022/23. Here we have not included 2020-23 so as not to confuse users on what data is currently available and comparable. In the summer, DWP will release linked data for 2018/19 to 2020/21, allowing a longer time series to be produced.