Absolute poverty
Absolute poverty measures the number of people living below a certain income threshold or the number of households unable to afford certain basic goods and services.
Relative poverty
Relative poverty measures the extent to which a household's financial resources falls below an average income threshold for the economy. Although living standards and real incomes have grown because of higher employment and sustained economic growth over recent years, the gains in income and wealth have been unevenly distributed across the population.
There is little doubt that Britain has become a more unequal society over the last 20-25 years. Indeed a report published in July 2001 found that inequality had continued to grow during the first four years of the Labour Government, with as many as one children in six in Britain living in poverty.
