Relative poverty refers to a situation where a person is not in direct material deprivation but cannot afford the standard of living considered typical in society.

According to data from the Estonian social survey conducted by Statistics Estonia, 263,200 people — more than 19 percent of the population — were living in relative poverty last year.

Compared to the previous year, the number of people living in relative poverty fell by 11,600, with a noticeable decline among people aged 65 and older. At the same time, however, the rate increased among single-parent households, due to rising pensions and reduced family benefits.

"In 2024, benefits for large families were reduced and the employment rate also declined. The latter contributed to a rise in relative poverty among both single-parent families and couples with one child," said Epp Remmelg, lead analyst at Statistics Estonia.

Last year, 38 percent of single-parent families reported experiencing relative poverty, along with 14 percent of couples with either one child or three or more children.

Among older adults, the rate of relative poverty fell by 9 percentage points over the year. Still, 62 percent of people aged 65 and older living alone perceived themselves to be in relative poverty. According to Remmelg, this is the lowest figure in the past 13 years and reflects both longer work histories among seniors and the fact that the average old-age pension has been moving closer to the national average income each year.

Relative poverty has increased, however, among those under 18. While 14 percent of this age group were living in relative poverty the year before last, the figure rose to 16 percent last year.

Among counties, relative poverty was highest in Ida-Viru County, where one in three residents lives in such conditions. In most counties, the relative poverty rate decreased. The lowest rates were recorded in Hiiu County (15 percent), as well as in Järva, Harju and Rapla counties.

Number of children living in absolute poverty nearly doubles

Absolute poverty refers to a situation in which a person is unable to meet their basic subsistence needs. Last year, the absolute poverty threshold stood at €346 per month and the number of people living below that line increased by about 8,000 compared to 2023. In total, 44,400 people were living in absolute poverty last year.

"The sharp increase in prices three years ago also led to a rise in absolute poverty. In recent years, the level of absolute poverty has remained largely stable," said Epp Remmelg.

She added that last year's rate of absolute poverty was not unusually high, as it was roughly the same in 2016.

What stands out, however, is the near doubling of the number of children living in absolute poverty: in 2023, they made up 2.4 percent of the population, but last year the share rose to 4.5 percent.

Household income, adjusted for household composition, increased by an average of 7 percent last year. Wages grew by the same percentage, while pension income rose by 10 percent. Income from child benefits, however, fell by 17 percent.

Income from property ownership has steadily increased and accounted for nearly 5 percent of total income last year.

Over a third of the population would struggle to cover unforeseen expenses

Statistics Estonia also measures material deprivation, referring to people who cannot afford many items or experiences considered standard in society.

These include being unable to pay rent and utility bills on time, maintain a sufficiently warm home, cover unexpected expenses, eat meat or fish every other day, take a one-week vacation away from home, own a car, replace worn-out clothes, own at least two pairs of outdoor shoes or replace worn furniture.

Last year, Estonia's material deprivation rate was 7.7 percent. According to Epp Remmelg, this figure has consistently fluctuated between 6 and 7 percent.

"The hardest challenge for people is coping with unexpected expenses over €807. Thirty-six percent of the population cannot manage that," she said.

Among households, 26 percent cannot afford a one-week annual vacation away from home, one in five cannot replace furniture when needed and 12 percent cannot regularly engage in hobbies.

Material deprivation is most widespread among single parents — 19.1 percent this year, down from 25 percent last year. Working-age individuals and couples report significantly less deprivation.

A total of 4,980 households took part in the Estonian social survey.

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