Minimum Income Standard
60 second overview
The Minimum Income Standard measures the level of income needed for what the public regard as a minimum decent standard of living. This latest Minimum Income Standard (MIS) research shows that 4 in 10 Londoners can’t afford a decent standard of living.
Do you earn enough for a minimum decent standard of living in London? Find out with our Interactive MIS Calculator.
What's the issue?
Many Londoners do not have what they need to get by. 27% of Londoners live in poverty, and over 1 in 5 employees are low-paid. But even people who are not living in poverty, according to the definition used in London’s Poverty Profile, can still be struggling to afford a decent, basic lifestyle.The Minimum Income Standard (MIS) series looks at what the public consider to be a minimum socially acceptable standard of living. The 2017 report found that 4 in 10 Londoners cannot reach that level, compared to 3 in 10 people in the UK as a whole. This represents 3.3 million Londoners
What are we doing?
We fund the Minimum Income Standard London research series with Loughborough University. The first edition of which was published in 2016.
MIS is based on detailed discussions with members of the public about the goods and services needed for households to reach a minimum socially acceptable standard of living, which covers essentials and enables participation in society.
The research incorporates the public’s views of how much is needed to meet costs such as food, housing, fuel costs, household goods, childcare and transport. It also looks at basic social and cultural participation, which is an important part of what the public consider a minimum living standard. This includes the opportunity to take part in activities, to have one low-cost one week holiday in the UK per year, to give presents, and to have some modest meals out.
What have we learnt?
Here are some key findings from the 2017 Minimum Income Standard report (findings are from 2015/16).
39% of Londoners have an income below the MIS, compared to 30% in the UK as a whole.
This represents 3.3 million Londoners. However, this has reduced from 2014/15, when the figure was 3.5 million (41%).
Higher living costs such as housing and childcare make reaching an MIS more expensive in London.
While some costs in London are similar to other urban areas in the UK, others such as housing and childcare are much more expensive. Consequently, it costs between 16% and 53% more to reach a minimum decent standard of living in London than in the rest of the UK.
Over half of London’s children live below the MIS threshold
Children are the most likely to be below the MIS threshold, with 52% below this threshold in 2015/16 – or 1 million children. This is compared to 44% of children in the UK as a whole.
Over three quarters of Londoners below MIS are in rented accommodation
1.3 million Londoners below the MIS are renting privately, and 1.2 million from a social landlord.
Londoners need to earn between 42% and 68% more than households outside the capital to reach MIS.
This is even higher if families with children rent in the private rented sector.
Single working age adults face the largest difference in cost between living in London and living outside London.
Private rents make up 50% of a minimum weekly budget for single adults in Inner London, 40% in Outer London, and 30% in the rest of the UK.
London’s women are more likely to be living below the MIS than men.
38% of women are living in households with insufficient income, compared to 31% of men.
Mubin Haq, our former Director of Policy and Grants comments:
While there has been a slight reduction in the number of Londoners who don’t have enough for a minimum, decent standard of living, the figure remains worryingly high, with 3.3 million Londoners struggling to make ends meet. Whilst there have been record numbers moving into work, many of these have been in low-pay sectors. The Government has tried to address this with its National Living Wage (NLW). However, despite a 4% increase in the NLW this year, it simply does not provide enough to reach a decent standard of living, especially in London. For a single working-age Londoner working full-time on the NLW, it provides just half of the income needed. Outside of London it provides over three-quarters of the income required. The high cost of living in the capital is not reflected in the NLW and this has harsh consequences for those earning the bare minimum. London can afford to pay a higher rate and it will struggle to recruit and retain staff if the disconnect between the cost of living and wages continues. Whilst there has been much focus on in-work poverty the research also highlights growing number of pensioners unable to reach a decent standard of living. Since 2010/11 the number of pensioners below this level has increased from 23% to 32%. Whilst still lower than other groups, this is a substantial increase and a reversal in a long running trend of improved living standards for this age group.
This latest analysis once again reveals that it costs more to have a minimum standard of living in London. Much of this difference is down to much higher rents, the cost of childcare and transport costs. Despite a significant boost to the National Living Wage in April 2017, the reality for many working families living in London is that gains from increased earnings are all too easily wiped out either by increases in private rents or the substantial cost of childcare, only a fraction of which is covered through current state support. The result of this is that around four in every ten people living in London do not have the income they need for a minimum decent standard of living; more than half of children living in London are growing up in households that are unable to afford this standard of living. So what can be done? Housing and childcare continue to pose the most significant policy challenges in London. Providing genuinely affordable housing, though significant investment in social housing or by establishing far stronger links between incomes and rents, may begin to ease the pressure on household budgets posed by housing costs. Providing adequate support for childcare costs for working households would also go some way towards helping families to afford their minimum needs. More broadly, honouring the commitment to do something to help the just about managing families might serve to halt the decline in living standards experienced by so many households over recent years.
Where can I find out more?
Here is the 2017 Minimum Income Standard report
From our Twitter
People who are experiencing problems in the private rented sector must be empowered to speak out about the issues affecting them. We fund a variety of projects which help tenants to make their voices heard http://bit.ly/2CG8Xrs24 Jan 2019
Applications are still open to deliver an evaluation of our Strengthening Voices, Realising Rights initiative. Deadline 8 February. Full details here http://bit.ly/2AQNigm23 Jan 2019
It's good news that rents in the capital are falling, but new figures show that the average Londoner spends 41% of their wage on rent. We need to see more genuinely affordable, good quality homes for London http://bit.ly/2COQwBl23 Jan 2019
Use London's Poverty Profile? Then shape its future. Take our survey to help us build a new LPP that provides a richer picture on poverty and inequality in London http://bit.ly/2FRlrQy23 Jan 2019