Doorda Knowledge Base

Household Income

The Household income data contains statistics of model-based small area income estimates for the financial years 2011/12, 2013/14 and most recent publication of 2015/16. The small area income estimates are available for middle layer super output Areas (MSOAs) in England and Wales, Doorda has then mapped these to Output Areas and Postcodes.

The financial years  2011/12 and 2013/14 were originally released with weekly figures, whereas the most recent (2015/16) was released with annual figures. We have standardised all the data as annualised figures.  

Estimates of average income are produced for the following four income types:

  • Total annual household income
  • Net annual household income
  • Net annual household income before housing costs (*equivalised)
  • Net annual household income after housing costs (equivalised)

Total annual household income

Total annual household income is the sum of the gross income of every member of the household plus any income from benefits such as Working Families Tax Credit.

Net annual household income

Net annual household income is the sum of the net income of every member of the household. It is calculated using the same components as total income but income is net of:

  • income tax payments;
  • national insurance contributions;
  • domestic rates/council tax;
  • contributions to occupational pension schemes;
  • all maintenance and child support payments, which are deducted from the income of the person making the payments; and
  • parental contribution to students living away from home.

Net annual household income

Net annual household income before housing costs (equivalised) is composed of the same elements as net household weekly income but is subject to the OECD’s equivalisation scale*.

Net annual household income

Net annual household income after housing costs (equivalised) is composed of the same elements of net household weekly income but is subject to the following deductions prior to the OECD’s equivalisation scale being applied:

  • rent (gross of housing benefit);
  • water rates, community water charges and council water charges;
  • mortgage interest payments (net of any tax relief);
  • structural insurance premiums (for owner occupiers); and
  • ground rent and service charges.

Sample Size

Weekly household income type No. & % of households removed No. households in final sample No. postcode sectors in sample No. msoas in sample
Total (unequiv) 186 (1.23%) 14,991 1,173 2,539
Net (unequiv) 310 (2.04%) 14,867 1,173 2,535
Net (equiv) before housing costs 309 (2.04%) 14,868 1,173 2,535
Net (equiv) after housing costs 493 (3.25%) 14,684 1,173 2,530

 

Equalisation is a standard methodology that adjusts household income to account for the different financial resource requirements of different household types. Household size is an important factor to consider because larger households usually need a higher income than smaller households to achieve a comparable standard of living. The composition of a household also affects resource needs, for example, living costs for adults are normally higher than for children. After equivalisation has been applied, households with the same equivalised income can be said to have a comparable standard of living.

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