Living standard report shows 39% of Londoners cannot afford basic decent standard of living

The new Minimum Income Standard (MIS) London report shows that 39% of Londoners cannot afford a basic decent standard of living.

MIS is based on detailed discussions with members of the public about goods and services households need to reach a socially acceptable standard of living, which covers essentials and enables participation in society. 

The new report provides an update of the cost of a minimum budget, needed for a minimum standard of living, for four core households in Inner and Outer London comparing these with the rest of the UK. The update is based on price increases between 2016 and 2017, along with available data concerning childcare, transport and housing costs in the capital.

The report is by researchers at the Centre for Research in Social Policy at Loughborough University and is funded by the Trust.

Key findings

  • 39% of Londoners have an income below MIS, significantly higher than 30%

in the UK as a whole. This is 3.3 million Londoners with incomes below that

needed for a minimum decent standard of living. However, this has reduced

from 2014/15 when the number was 3.5 million (41%).

  • Many costs in London are similar to those in other urban areas in the UK.

However, higher living costs, such as housing and childcare, mean that reaching

a minimum decent standard of living in the capital costs between 16% and 53%

more than in the rest of the UK.

  • The largest difference in costs is between single working-age adults living in

London and those outside of London. Private rents make up half of a minimum

weekly budget for single adults in Inner London and 40% in Outer London,

compared to 30% in the rest of the UK.

  • Non-working Londoners face an increasing risk of having incomes well below

MIS. For working-age single Londoners, out-of-work benefits provide just a

quarter of the minimum needed (after rent and council tax); in the rest of the

UK, the same benefits cover just over a third of the minimum needed by single

working-age adults.

  • In spite of a 4% increase in the National Living Wage (NLW) in April 2017, few

households are able to reach the income needed for a minimum standard

of living, working full-time on the NLW. It provides around half of the income

needed by single working-age Londoners, but over three-quarters of the income

needed to live in the rest of the UK.

  • Londoners need to earn between 42% and 68% more than households outside

of the capital in order to reach MIS. This is even higher if families with children

rent in the private rented sector.

  • Pensioner couples in receipt of pension credit receive nearly enough to reach

MIS in the UK outside London and in Outer London. However, in Inner London

pensioner couples fall 21% short of meeting these minimum needs.

  • Children are most likely to be below the MIS threshold, with 52% below this

threshold in 2015/16, well above the 44% of children below MIS in the UK as a

whole. 1 million children live below MIS in London.

  • While the proportion of working-age adults below MIS in London has fallen

between 2010/11 and 2015/16, the number remains the same at around 2

million. The proportion of pensioners below this level has increased from 23% to

nearly a third over the same period, numbering around 300,000.

  • In London in 2015/16, more than a third of women (38%) are living in

households with insufficient income, compared to 31% of men.

  • Over three-quarters of all Londoners below MIS are in rented accommodation:

1.3 million renting privately and 1.2 million renting from a social landlord. 

MIS 2017 report 774.9 KB