Household spending in Britain: What can it teach us about poverty?

Much of the recent policy debate surrounding poverty in Britain focuses on income as a measure of living standards. This report considers one alternative to income for measuring poverty that has been largely overlooked in the mainstream poverty debate in the UK—namely household expenditure. Economic theory suggests that household expenditure is an important measure of financial well-being. Using 30 years of data from household surveys, this report investigates how using spending, rather than income, as a measure of well-being alters our view of who is poor. The study examines the spending levels of the lowest-income households and additionally analyzes whether low-income pensioners' spending on basic and non-basic items increased as a result of the large increases in entitlements to means-tested benefits since 1999. (REPORT)