London’s Poverty Profile 2022: COVID-19 and poverty in London

London’s Poverty Profile (LPP) provides evidence and insight on poverty and inequality in London. It shines a light on the nature of poverty in the capital, in the hope of prompting action from local and national government, the third sector, faith groups, practitioners, experts, businesses, the public and anyone who cares about making London a fairer city to live in. The annual LPP report provides a summary of the main findings from the last year, looking at key themes. This year we take a deep dive into Living Standards, Work and Health.

Introduction

As the LPP 2021 report showed, the individuals, families and communities hit the hardest by the COVID-19 pandemic had already struggled the most prior to the outbreak.

This year’s LPP summary report explores the implications of the ongoing pandemic and the more recent cost of living crisis for poverty and inequality in London. Comparisons to pre-pandemic levels – when many were already struggling – are sobering.

As well as the highest COVID-19 mortality rate in the country, wellbeing and mental health has deteriorated in London, and waiting times for healthcare have shot up. And things are not getting any easier. The current cost of living crisis is putting strain on families across London and, as so often, this is most deeply felt by our most vulnerable and deprived communities.

This report looks at the cost of living crisis in the early months of 2022 and how this has impacted living standards. This is analysis that we will continue to develop in the coming months through the launching of a new Cost of Living Index for London.

Key findings

Themes of the report

Take a look at three key charts below from the themes of the report - Living Standards, Work and Health - before exploring the sections in more detail.

Poverty was a serious issue in London prior to the pandemic, and many struggled with the costs of housing, heating and food. During the pandemic, more Londoners, both in and out of work, have needed benefits to make ends meet. The fall in incomes and recent increases in the cost of living are expected to worsen living standards for many. In this context, the mental well-being of Londoners has been significantly eroded.

Despite higher incomes, more expensive housing means that the 2019/20 (pre-pandemic) poverty rate in London almost doubles when housing costs are taken into account (from 16% to 27%), making London the region with the highest poverty rate in the UK. Poverty rates are even higher in Inner London (30%), where they are 5 percentage points above many parts of the North of England.

For some groups, the rate was even higher; the poverty rate amongst non-White households in London was 39%, and for single parents it was 53%. Poverty rates also varied significantly across London’s boroughs.

Figure 8: Self-reported reasons for increases in cost of living: January - February 2022 (January - February 2022)

Explore Living Standards

Overall levels of economic activity in London, which fell as a result of the pandemic, began to increase as restrictions were eased. Despite Government support, unemployment rose in London, where it still remains above pre-pandemic levels. Crucially, this rise in unemployment has been felt unevenly, falling disproportionately on those least able to shoulder the burden.

As a result of the pandemic and the restrictions put in place to stop the spread of the virus, there was a significant reduction in economic activity in the initial stages of the pandemic. By the second quarter of 2020 (April to June) GDP in London was almost 20% smaller than in the last quarter of 2019. This reduction in economic activity in the capital has been less intense than in England as a whole, and London has also seen a quicker recovery, so that by the second quarter of 2021 GDP had almost reached pre-pandemic levels.

Figure 17: Changes in the employment rate during the pandemic in England and London: October-December 2019 to October-December 2021 (October-December 2019 to October-December 2021)

Explore Work

The most apparent impact of COVID-19 is on health. At the time of writing, more than 135,000 people across England have tragically lost their lives and in London alone, the death toll surpassed 20,000. The pandemic has also had wider impacts on the NHS, with a substantial increase in the number of patients on waiting lists as well as longer waiting periods.

The overall direct health impacts of COVID-19 have not been evenly spread. Morbidity and mortality have been higher amongst older people, individuals living in deprived areas and those from Black and Minority Ethnic backgrounds. London was one of the first areas of the UK to experience widespread transmission of the virus. By the start of the first national lockdown in March 2020, 47 per 100,000 London residents tested positive for COVID-19, compared with an average of 13 per 100,000 across the rest of England. By February 2021, this proportion had risen to 7,768 per 100,000, compared with an average of 6,186 per 100,000 across the rest of England.

By the summer of 2021, cumulative infection rates in London (standing at 11,280 at the end of August), were similar to those of the rest of England and remained so until the end of January 2022. According to more recent data, London cumulative infection rates stand at 28,233 per 100,000 population.

Figure 30: Cumulative age-standardised COVID-19 mortality per 100,000 population (ASMR): March 2020 - January 2022 (March 2020 - January 2022)

Explore Health
London’s Poverty Profile shines a light on the nature of poverty and inequality in London. This has never felt more pertinent. The last two years have seen the scale and complexity of London's challenges worsen. situation is difficult, but our city is a resilient one, and the community spirit and energy of those fighting for change is what gives many of us hope. We will need to work together and harness this, using every tool available to us to tackle these problems and ensure that nobody has to live a life of poverty. We hope that this report can be a resource toward that change.
Manny Hothi, Chief Executive, Trust for London