UK at higher poverty risk than EU average

Some 17.1 per cent of the UK population, equating to 10.7 million people, were defined as being at risk of poverty in 2010, according to official analysis published today.

The Office for National Statistics (ONS) said the figure was higher than the overall EU poverty risk rate of 16.4 per cent.

But while the UK poverty risk rate fell by 1.9 per cent between 2005 and 2010, it has remained relatively stable across Europe over the same period.

The rate for Brits aged 65 and over was significantly higher than the EU average, at 21.4 per cent compared with 18.9 per cent.

In 2010, the UK had the 10th highest at-risk-of-poverty rate among the 27 EU member states, the report reveals.

The highest rates were in Latvia at 21.3 per cent, Romania at 21.1 per cent and Spain and Bulgaria, both on 20.7 per cent.

The lowest rates were found in the Czech Republic at nine per cent, the Netherlands at 10.3 per cent, Slovakia at 12 per cent and Austria at 12.1 per cent.

People are defined as at risk of poverty if their disposable income is below 60 per cent of the UK median disposable income.

The rate declined as average disposable income fell after the onset of the economic downturn in 2008-09, which may seem surprising as this was a time when the UK was in recession and the unemployment rate was rising.

However, between these two years, the UK median disposable income actually fell in cash terms on this measure, leading to a reduction in the at-risk-of-poverty threshold.

This in turn means that some individuals whose income was just below the threshold in 2008 would no longer be classified as at risk of poverty in 2009, even if their incomes had not changed, the ONS said.