It’s Challenge Poverty Week starting Monday 2^nd of October and the Poverty Alliance is shining a spotlight on the people of Scotland’s ongoing struggle to access adequate incomes, to allow them to pay for their essential needs and live with dignity. This has been made more difficult because of the fallout from Covid-19 and the current cost of living crisis.

There will be many conversations about this topic so here’s a jargon buster to explain some of the most important phrases or terms you’ll hear this week.

Adequate Income: An income that’s enough to secure the basics required for a healthy, secure, and dignified life.

Universal Basic Income (UBI):  This is a guaranteed, regular, non-means tested income paid by the Government to every individual to cover their basic needs regardless of their age, wealth, or employment status. The system is currently being trialled in England for the first time with a group of 30 individuals set to receive £1600 per month. You can read more about the UBI here.

Minimum Income Guarantee (MIG):  The idea here is to set a minimum income level or “safety net” for the people of Scotland, to ensure everyone could afford their basic needs, such as food and energy, allowing them to live with dignity. This would be achieved through better wages, job security and reforms to the current benefit system as well as targeted payments to keep everyone above the set minimum income. The Scottish Government are committed to implementing a MIG and have set up a steering group to work on its delivery. You can find out more about the MIG here.

Minimum Income Standard: This is based on annual research produced by the Joseph Rowntree Foundation and carried out by Loughborough University. It identifies the level of income required to achieve an acceptable standard of living. The latest figures, produced in September 2022 reported that a single person required an income of £25,500 a year to achieve the minimum standard and a couple with 2 children, £43,400 between them, with 2023’s figures likely to be higher in lieu of the cost-of-living crisis. These figures are also used to inform the Living Wage (see below). You can read more about the MIS here.

National Minimum Working/Living Wage:  These are the minimum hourly rates employers must pay their staff in Scotland and throughout the UK and they are recalculated by the UK Government every year in April. The rate paid will depend on the employee’s age and whether they are an apprentice, however everyone over the age of 23 should receive at least the National Living Wage currently sitting at £10.42 per hour. You can check the current rates for the Minimum Working /Apprentice wage rates here.

Real Living Wage: This is separate from the UK Government’s National Minimum/Living Wage and is determined by the Resolution Foundation and overseen by the Living Wage Commission. The calculations are based upon the cost of a basket of household goods and services for example food, transport, and housing costs however they are the only organisation to include increases in annual living costs in their calculations. The Real Living Wage hourly rate currently sits at £10.90, rising by 10.1% from last year and the and the new rate for 2023-24 will be released in October this year. Over 13,000 employers have voluntarily committed to paying their staff this higher rate. You can read more about the Real Living Wage in Scotland here.

If you want to join the discussion about adequate incomes in Challenge Poverty Week, at Money Advice Scotland we are holding an in-person event Challenge Poverty Week – Adequate Incomes: Panel Discussion on the 4th of October 2023, with speakers from  Centre for Research in Social Policy (CRSP) at Loughborough University, Living Wage Scotland and Autonomy. You can reserve your ticket here.