Poverty and inequality in London

As many as 28 per cent of Londoners are living in poverty, according to a report from the New Policy Institute. This is seven percentage points higher than in the rest of England.

The report is based on a wide range of official indicators related to poverty and inequality in London. It highlights how the capital compares with the rest of the country, trends and differences between groups and boroughs, and changes both since the last report in 2011 and over the longer term.

Key findings

  • In the three years to 2011-12, 2.1 million people in London were in poverty. This 28 per cent poverty rate is seven percentage points higher than the rest of England. Incomes in London are more unequally spread than in any other region: it contains 16 per cent of the poorest decile of people nationally and 17 per cent in the richest decile.
  • Over the ten years to 2011-12, the number of Londoners in in-work poverty increased by 440,000. In the same period the number of pensioners in poverty fell by 110,000 and the number of children in workless families in poverty fell by 170,000. Now 57 per cent of adults and children in poverty are in working families.
  • The number of people in poverty in the social rented sector fell by 340,000 in the last ten years. But this has been more than offset by rising poverty in the private rented sector (up 460,000). At 39 per cent, the private rented sector now has a larger share of people in poverty than either those in social rent or owner-occupation.
  • 375,000 people were unemployed in London in 2012, up more than 40 per cent since 2007. 190,000 people worked part time but wanted a full-time job in 2012, nearly double the level in 2007. In 2012, 25 per cent of economically active young adults in London were unemployed. This compares with 20 per cent for young adults in the rest of England and is around three times the rate for all economically active working-age adults in London.
  • In 2012 just under 600,000 jobs in London were paid below the London 'living wage' (£8.55 an hour). Over 40 per cent of part-time jobs and 10 per cent of full-time jobs are low paid.
  • 26 per cent of London households received housing benefit in 2012 – a higher proportion, and a faster growing one, than the average for England. Average housing benefit levels are also much higher in London at £134 a week compared to £92 a week for England. As a result, changes to housing benefit are having a wider and deeper impact in London. High housing costs in London and national caps to benefit will make large parts of London unaffordable to low-income households. Around 80,000 London families are estimated to be affected by the 'bedroom tax'.

Source: Hannah Aldridge, Sabrina Bushe, Peter Kenway, Tom MacInnes and Adam Tinson, London's Poverty Profile 2013, New Policy Institute
LinksReport | Summary | Trust for London press release | BBC report | Guardian report | Inside Housing report

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Publication date: 
Oct 14 2013