Low income

Londoners living in poverty

Date 31 August 2017
Date updated 31 May 2018
Overview

The indicators in this topic look primarily at incomes in London and how they compare with the rest of England. It does this mainly through the lens of poverty: those with incomes so low that they cannot fully meet their needs. Find out more about poverty and low income are defined here

After you take housing costs into account, poverty is higher in London than in the rest of England (27% vs 21%). The number of adult Londoners in working families who are living in poverty has risen by 270,000 over the last decade. There has also been an increase in the percentage of people living in the private rented sector who are in poverty. 43% of people in poverty are private renters, compared to 36% who are social renters, and 22% who own their own homes. The percentage of people living in poverty in the private rental sector was 23% only ten years ago.

61% of poor Londoners live in Outer London. In the three years to 2015/16, 37% of children, 24% of working age adults, and 19% of pensioners in London were in poverty. 34% of people with a disabled adult in the household live in poverty, compared with 25% of people without a disabled adult in the household.

Low income: Indicators

Household work status and the income distribution

This graph shows the position of Londoners within the UK income distribution by several different work statuses. These are: whether they are in households where all adults are working full-time; all work but one or more is part-time; only some work; none work; or all adults are of pension age. Families where all the adults are working full-time are mainly found in higher income quintiles. However, more than 1 in 10 (13%) adults in the poorest 20% are in households where all adults are working full-time. Families where all adults are in work, but one or more are working part- time, are spread fairly evenly across the second, fourth and fifth quintiles with slightly more found in the middle 20%. There are fewer in the poorest 20% at 1 in 10 (10%). Households where some adults work and some do not are common across the entire distribution, …

Low income thresholds

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The poverty measure typically used in this report is being in a household with an income below 60% of the median. This is adjusted for household size and is after taxes such as income tax and Council Tax. The table below puts these poverty thresholds in the context of similar concepts. For example, a working-age couple with an income below £288 a week before removing housing costs (or £248 after) is considered to be in poverty. On an annual basis, this is equivalent to around £14,980 for this family type before housing costs (BHC), or £12,890 after housing costs (AHC). 

However, when members of the public are asked what income is needed to have a socially acceptable minimum standard of living (MIS – Minimum Income Standard – a different concept to poverty), the values are quite a bit higher: £351 a week in Inner Lond…

Poverty over time

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This graph looks at the changing picture of poverty in London. On average in the three years to 2015/16, 27% of people in London were in a household in poverty after housing costs (AHC). This is equivalent to around 2.3 million people. 21% of people were in households in AHC poverty in the rest of England.

On this after housing costs measure, the poverty rate in London has fallen slightly: down two percentage points from 29% in 2007/08. The number of people in poverty in London have been largely unchanged over the last six years, although this is in the context of a growing population. Between 2008–11 and 2013–16, the increase was less than 20,000 and not statistically significant.

The BHC measure includes housing benefits as income and does not deduct rent. In London, where housing costs are higher, housing benefits can make u…

Disability and poverty

Disability is strongly associated with poverty, both because disability brings with it extra costs which reduce the resources available relative to non-disabled people, and because it often reduces the capacity to work. This graph shows the poverty rate for people in families with and without a disabled adult in London and the rest of England. It also shows the share of all people in poverty who belong to such a family (see bars on right hand side).

The poverty rate for people in a family with at least one disabled adult is higher in London than for those without by nine percentage points at 34%. This is also higher than the poverty rate for those in families with a disabled adult in the rest of England, which is 26%.

However, despite the higher poverty rates for families with a disabled adult in London, they make up a smaller share of pov…

Poverty by age

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This looks at poverty rates for children, working-age adults, and pensioners in 2003–04 to 2005–06 and in 2013–14 to 2015–16. It uses poverty measured after housing costs (AHC). It splits this by Inner and Outer London, London overall, and the rest of England.

In the three years to 2015–16, 37% of children, 24% of working-age adults, and 19% of pensioners were in poverty in London. In numbers this is 700,000 children, 1.4 million working-age adults, and 200,000 pensioners in poverty.

Compared with a decade earlier, the proportions of both children and pensioners in poverty are lower. The child poverty rate has fallen from 41% to 37%, and the pensioner poverty rate has fallen from 21% to 19%. Despite this, because of population growth, there are now around 90,000 more children in poverty and an unchanged number of pensioners. The proportion…

Work and poverty

This graph looks at poverty by age and family work status. In the three years to 2015/16, the largest single group in poverty were adults in working families, at 830,000, followed by 540,000 adults in workless families in poverty. There were also 480,000 children in working families in poverty, compared with 220,000 in workless families.

These numbers have changed dramatically over time. Compared with a decade earlier, there are 270,000 more adults in working families in poverty, and 180,000 more children in working families in poverty. Their workless counterparts have fallen by 20,000 and 110,000 respectively. Some changes were more drastic in the preceding decade: the number of pensioners and adults in workless families in poverty fell considerably to 2005–06, but has fallen less since. If we look over just the last five years, there ar…

In-work poverty and work intensity

This indicator looks at the proportion of people in poverty by the family’s work status. The number of hours worked by members of a family is important for determining whether they are likely to be in poverty or not. Families in which all adults were working full time had the lowest proportion in poverty at 8%. In contrast, those with only part-time employees in the family had the highest rate, with 45% in those families in poverty. Families with a self-employed member also had a relatively high poverty risk at 28%.

Over the last 10 years, the proportion of people in every working family type in poverty has increased. It has increased most for those with one full-time employee and one adult not working (six percentage points) and families with a self-employed adult (five percentage points). There has been less change in the last five year…

Housing tenure and poverty

This graph looks at the number of people in poverty in each housing tenure over time. In the three years to 2015–16, 960,000 private renters, 810,000 social renters, and 490,000 owner-occupiers were in poverty. As a proportion of the total for each group, this means 39% of private renters, 46% of social renters, and 12% of owner-occupiers were in poverty.* This was a remarkable shift in poverty tenure in London, given that the private rented sector’s poverty numbers were still the lowest of the three in 2007–10.

These three tenures have followed different trends in the last few years. In the last five years, there has been a negligible change in the number of social renters in poverty, an increase of 160,000 private renters in poverty, and a fall of 130,000 owner-occupiers in poverty.

There was a large increase in private…

Children in poverty by housing tenure

This graph looks at which housing tenure children in poverty live in. Over the three years to 2015/16, there were around 300,000 children living in poverty in the private rented sector, and 290,000 living in poverty in the social rented sector. There were far fewer living in owner-occupation, at 70,000.

However, the numbers of children in poverty in each of these tenures have followed very different trajectories. The number of children in poverty in the social rented sector fell to 240,000 in 2009–12, but has since increased again. In contrast, there were fewer than 100,000 children in poverty in private rented accommodation in the late 1990s. Since 2004–07, this number has roughly tripled.

The number of children in poverty in owner-occupation has been falling in recent years, by around 40,000 since 2011–14.

Expressed as a proportion, over …

Child material deprivation

Figure 3.10 looks at the proportion of children in households in poverty unable to afford each item on the basis of cost. We are interested in this because, although the basic income poverty measure can account for housing costs, other costs that are higher in London do not feature.


One way of rectifying this problem is by looking at ‘material deprivation’, which is the state of being unable to afford several basic items as a result of cost. A household is considered materially deprived if it has a ‘score’ above a certain value. Lacking an item contributes to the score, and the more common a lacked item, the higher the score attached to it. Overall, 530,000 or 28% of all children in London were materially deprived. This rate has fallen from 32%, the figure both five years earlier and a year earlier. In contrast, 20% of children in the res…

Low income across London

This map shows poverty rate estimates (after housing costs) for areas known as middle-layer super output areas (MSOAs). These are relatively small areas with a population of around 7,500. These statistics are experimental and so should be considered as indicative rather than definitive, but reveal interesting trends. 

The first is how much of London has poverty rates above the rest of England average of 21%. Only areas at the edge of London south, east and northwest are below this figure.

The second is the concentration of poverty in traditional areas such as in Tower Hamlets, Hackney and Newham. Although this series of reports has documented poverty shifting out of Inner London, the most concentrated areas of high poverty are still there and in the north east.

There are also noticeable pockets of high poverty rates in areas o…

Borough poverty rates

Child poverty rates by borough

This graph gives estimates of the percentage of children living under the poverty line in each borough between October and December 2015. Tower Hamlets has by far the highest rate of child poverty – 6 percentage points above the second highest borough, which is Islington. On the other end of the scale, Richmond has the lowest rate of child poverty in London, 6.5% below the next lowest Borough – Kingston (not counting the City of London).

Child poverty is significantly higher in Inner London than Outer London. The 6 boroughs with the highest rates of child poverty (and 9 of the top 10) are all in Inner London. All 9 of the boroughs with the lowest child poverty rates are in Outer London (excluding the City of London). Barking & Dagenham is the Outer London borough with the most children living below the poverty line. Wandsworth is th…