Absolute poverty has different meanings in different contexts. I thought it'd be interesting to compare the UK meaning with the international one and consider the extent to which they are comparable.
First, here is the United Nations 1995 definition of absolute poverty:
A condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services.
This is also referred to as extreme poverty, so to avoid confusion I'll use that to mean international poverty and absolute poverty to mean the UK definition.
The World Bank provides an income-based definition of extreme poverty which is often associated with the UN definition:
An individual living on less that $1.90 per day is in extreme poverty.
This amount is not in normal US dollars but in purchasing power parity dollars (PPP) that are stated in 2011 prices. The PPP system accounts for the fact that prices of common goods and services in a richer country tend to be higher than those in a poorer country. For example, a loaf of bread that costs $1 in the USA may cost the equivalent of $0.50 in Rupees in India. PPP conversion rates are different to exchange rates and are much less variable over time (the reason for that is an interesting story in itself).
PPP conversion factors from the World Bank shows that $1 PPP equates to £0.76 in 2011. So the extreme poverty line for 2011 equates to 1.90 divided by 0.76 which is £2.50 per day.
Next, here's the current UK definition of absolute poverty:
An individual living in a household with an income that is less than 60% of the inflation adjusted UK median for 2010/11 is in absolute poverty.
(It's worth digressing a little to explain why it's called "absolute". The other measure of poverty in the UK is relative poverty which is defined in a similar way except the threshold is 60% of the current year's median. That is, it is defined relative to the income distribution that year. The absolute threshold does not depend on changes in the income distribution; it only changes due to inflation.)
According to the Households Below Average Income (HBAI) report the absolute poverty threshold in financial year 2013/14 (most recent available) is an income of £14,600 per annum, or £40 per day. This is after tax and includes benefits but before housing costs.
A standard household in HBAI has two adults and no children. (Actual household incomes recorded in surveys are converted to this standard using a Dr Who-esque sounding process called equivalisation.) This gives a per person threshold of £20 per day.
The value of £2.50 from above is for 2011, so we need to adjust for inflation. The best choice here is RPI as it is used in HBAI to adjust the absolute poverty threshold itself. Once this is done we find the value for 2013/14 is £2.70.
So in 2013/14 prices, the UK threshold for absolute poverty is £20 per day and the international one is £2.70, a factor of 7.4 lower. As you might have guessed before seeing these figures, the UK and international definitions represent two very different levels of poverty.
The UK adopts a much higher threshold for poverty because it is one of the richest countries in the world. This is best quantified with Gross National Income which can be thought of as being similar to GDP except that it only includes incomes of residents. For example, the UK's gross national income per capita is about fifteen times that of Cameroon in 2011 PPP dollars. Also, a third of Cameroon's population is estimated to live in extreme poverty, whereas 17% of the UK's population live in absolute poverty (before housing costs).
Of course, as stated in the 1995 UN definition, we cannot assess poverty using numbers alone. A rich country uses its high gross national income to provide high levels of public services such as education, welfare, health, transport and justice. Many of those living in extreme poverty have little or no access to such services.
I'm concerned that 10 million people in the UK live in absolute poverty, but I'm even more concerned that about a hundred times that number live in extreme poverty worldwide. Latest estimates for 2012 put this at 896 million people — 12.7% — of the world's population.
There is some good news though: the level of extreme poverty is falling. It was 37% in 1990 and 44% in 1981. When you see these numbers, the UN goal of ending all extreme poverty in the world by 2030 doesn't seem as far fetched as many might think.
If you're interested in learning more about how the numbers connect to the reality of people living with extreme poverty then watch the film Don't Panic by Hans Rosling of Gapminder.