In 2023, 9.0% of Iceland’s population, or approximately 35,000 people, lived below the low-income threshold, the lowest rate in Europe. Renters were significantly more likely to fall below this threshold than homeowners.
Approximately 35,000 people
The proportion of individuals living below the low-income threshold in Iceland was 9.0% in 2023, equivalent to approximately 35,000 people, Statistics Iceland reports.
Individuals below this threshold live in households where disposable income – defined as the total income of all household members after taxes – is less than 60% of the national median* disposable income, adjusted for household size.
In 2023, the low-income threshold was ISK 302,000 [ca. $2,100 / €2,100] per month for single-person households and ISK 634,000 [ca. $4,500 / €4,400] per month for households with two adults and two children.
*The median is the middle value in a sorted list of numbers and can provide a more representative measure of the data set than the average. It is often preferred over the mean when outliers in the data could distort the average.
Lowest in Europe
As noted by Statistics Iceland, Iceland had the lowest proportion of individuals living below the low-income threshold compared to European countries (9.0%, compared to the European Union average of 16.2%).
The second-lowest rate was in the Czech Republic (9.8%), while Latvia and Estonia had the highest rates (22.5%). Among Nordic countries, Norway had the second-lowest rate (11.5%), while Sweden had the highest (16.1%).
Housing, education
Statistics Iceland also notes that in 2023, there was no significant difference in the low-income rate among individuals aged 25 and older based on educational attainment. “Since 2019, differences in low-income rates by education level have diminished, unlike in the period from 2004 to 2018, when individuals with lower levels of education were more likely to fall below the threshold compared to those with university education.”
Households in rented accommodation are consistently more likely to fall below the low-income threshold than those in owned housing. “In 2023, 18.8% of households in rented accommodation were below the threshold, compared to 6.4% of households in owned housing. These findings suggest that renters experience less financial security than homeowners,” Statistics Iceland notes.
A few notable statistics:
- The proportion of men and women living below this threshold was nearly identical in 2023, at 9.0% for men and 8.9% for women.
- Over the past decade, the proportion of individuals below the low-income threshold has ranged from 7.6% in 2020 to 10.1% in 2017.
- In 2023, the low-income rate among households in the capital region was 9.4%, compared to 7.9% among households outside the capital region. The difference, however, is not statistically significant, which has also been the case in previous years.
