The London Poor

58% of London's residents in poverty are living in working households compared with 28% two decades ago. The report also shows that wealth inequality is more extreme than income inequality in London, with the top 10% of households owning just over half the city’s wealth, and the bottom 50% of households owning 5%.  The amount of wealth held by the bottom tenth of households decreased by a third in London between 2010–12 and 2012–14.

More than half of the 2.3 million Londoners living in poverty are members of households in which someone is earning money, research according to a study by the Trust for London. Overall, 700,000 children (37%), 1.4 million working-age adults (24%) and 200,000 pensioners (19%) live beneath the official poverty line. Households whose income after housing and taxes have been deducted is below 60% of the median income are counted as being in poverty, according to the official government definition. The number of people living in deep poverty (defined by those surviving on less than 50% of median income, rather than 60%) has risen by 1.5% in the past five years. 

Mubin Haq, director of policy at the Trust for London, which works to tackle poverty and inequality in the capital, said: “Despite record levels of Londoners in work, poverty rates have only nudged down slightly over the last few years. Over 2 million Londoners are struggling to make ends meet. That’s more than the entire populations of Manchester, Liverpool, Bristol, and Newcastle combined. The reality remains, that for many work does not pay enough, or offer the security that people need.”

The high cost of housing in the capital largely explains the higher rate of poverty in London. The rising cost of rents and the lack of availability of social housing mean that more people in poverty now live in the private rental sector than in any other kind of housing tenure, nearly 1 million. The number of children living in poverty in this sector has tripled over the past 10 years.

Low pay and insecure employment are both contributory factors. In the last decade, weekly pay in London has fallen, and a larger proportion of people were earning less than £200 a week in 2016 than in 2006, the study shows.  The number of workers in London on temporary contracts was at an all-time high in 2016 (260,000), and the proportion of those on a temporary contract who were looking for full-time work had risen from one in four to one in three in the past decade.

About 8,100 people were recorded sleeping rough in 2016-17, almost three times the number in 2006. There has also been a huge jump in the number of families living in temporary accommodation, arranged by the local authority. There were 54,000 households in temporary accommodation in the first quarter of 2017, a 48% increase on five years previously.