Households in Shetland who do not earn enough to have an acceptable standard of living

We know that it is more expensive to live in remote and rural parts of the UK than in urban areas. While poverty levels, including in-work poverty, in Shetland may not look stark when compared to Scotland as a whole, this is because the figures do not take into account the higher cost of living. 

In 2013 (with a policy update in 2016), a Minimum Income Standard (MIS) for Remote and Rural Scotland was developed. This is based on the MIS for the United Kingdom which is an ongoing research project led by the Joseph Rowntree Foundation and the Centre for Research in Social Policy. The MIS looks at what level of income is needed to afford a socially acceptable standard of living, and to participate equitably in society. 

“A minimum standard of living in the UK today includes, but is more than just, food, clothes and shelter. It is about having what you need in order to have the opportunities and choices necessary to participate in society”. 

In the paper ‘Living Well in a High Cost Economy’ (Hope et al, 2017), it was found that based on the MIS, people in Shetland needed an income of 120% of the UK median (after housing costs) to meet minimum income standards. On that basis, it was estimated that almost half of people in Shetland (49%) lived in households with an income less than the MIS benchmark income, compared to 36% for Scotland as a whole. In working households, 42% of people in Shetland were in a household with an income below the MIS threshold compared to 29% across Scotland.

Graph produced by research for "Living Well in a High Cost Economy" 2017 (Ipsos MORI)

Source

Living Well in a High Cost Economy, Ispos Mori, 2017 on behalf of Shetland Islands Council (SIC) and Highlands and Islands Enterprise (HIE) and; Minimum Income Standard (MIS) for Remote and Rural Scotland, HIE.

To calculate the UK Median Income for households, after housing costs, the median weekly rental costs from the Family Resources Survey are taken from the Median Income found in the CACI Paycheck data. The resulting value is then multiplied by 1.2 to give a benchmark value. The number of households in Shetland in the CACI Paycheck data earning below this benchmark is then calculated as a percentage of the total number of households in Shetland.

Most recent data

According to CACI Paycheck data (2021), 47% of household in Shetland do not earn enough to live well, based on the minimum income standard for remote and rural areas.

Why do we monitor this indicator?

We want more people to be able to earn enough to have an acceptable standard of living. In 2020, almost half of households in Shetland did not earn enough to ‘live well’ which means their income was not sufficient to cover the high costs of living here. This may mean that, even in households where adults are working and earning a decent wage, financial hardship may be a risk or already being experienced. 

This indicator contributes to monitoring the desired outcomes outlined in the People, Money and the Place priorities of the Partnership Plan. 

“The number of disadvantaged people and households in Shetland will be considerably reduced as a result of people being enabled and empowered to address the issues they face and helping others to thrive in the same way.”