Income and Poverty

London's Poverty Profile 2013

  • Published 14th Oct 2013
  • Authors: Hannah Aldridge, , , , Peter Kenway, , Tom MacInnes, , Adam Tinson,
  • Category: Income and Poverty

London’s Poverty Profile looks at the extent and depth of poverty and inequality in London. It is an independent report that presents evidence from official government data sources. The scope of this report is not limited to low income; it looks at the role of inequality, housing, work, education and health. Each of these are independently important but also are closely linked to poverty.

The analysis looks at a range of indicators for London, how they have changed over time, how this compares to the rest of England and how it varies within London itself.

This is the fourth report in the series. Each report has had a different focus: variations within London, London in the recession; and housing. In this report the focus is on welfare reform.

Key findings

  1. In the three years to 2011–12, 2.1 million people in London were in poverty. This 28% poverty rate is seven percentage points higher than the rest of England. Incomes in London are more unequally spread than in any other region. It contains 16% of the poorest decile of people nationally and 17% in the richest decile.
  2. Over the ten years to 2011–12, the number people in in-work poverty increased by 440,000. In the same period the number of pensioners in poverty fell by 110,000 and the number of children in workless families in poverty fell by 170,000. Now 57% of adults and children in poverty are in working families.
  3. The number of people in poverty in the social rented sector fell by 340,000 in the last ten years. But this has been more than offset by rising poverty in the private rented sector (up 460,000). At 39%, the private rented sector now has a larger share of people in poverty than either those in social rent or owner-occupation.
  4. 375,000 people were unemployed in London in 2012, up more than 40% since 2007. 190,000 people worked part-time but wanted a full-time job in 2012, nearly double the level in 2007. In 2012, 25% of economically active young adults in London were unemployed. This compares with 20% for young adults in the rest of England and is around three times the rate for all economically active working-age adults in London.
  5. In 2012 just under 600,000 jobs in London were paid below the London Living Wage (£8.55 per hour). Over 40% of part-time jobs and 10% of full-time jobs are low paid.
  6. Education in London continues to improve. Over the five years to 2012, the proportion of Inner London 16 year-olds entitled to free school meals who failed to get five ‘good’ GCSEs came down 20 percentage points (to 47%). The 16 percentage point fall in Outer London (to 55%) was also much better than in the rest of England (a 13 percentage point fall to 67%).
  7. Premature mortality rates in London for both men and women are down by around a third in 10 years (to 187 and 115 per 100,000), and are now below the England average (of 194 and 125).
  8. 26% of London households received housing benefit in 2012, a higher proportion and one that has grown faster than the average for England. Average housing benefit values are also much higher in London at £134 per week compared to £92 per week for England. As a result, changes to housing benefit will have had a wider and deeper impact in London. High housing costs in London and national caps to benefit will make large parts of London unaffordable to low-income households.
  9. Around 80,000 London families were estimated to be affected by the under-occupation penalty, losing on average £21 per week in housing benefit from April 2013. An estimated 475,000 families in 22 boroughs faced cuts in council tax benefit cut, with average cuts ranging from £1 to £5 a week.
  10. In 2009 the Inner East & South stood out as the worst performing sub-region but no longer does so. Levels of deprivation in outer boroughs both east and west, have been increasing.


About this report
This report was produced by the New Policy Institute and commissioned by the Trust for London. Responsibility for the accuracy of this report, including any errors or misunderstandings, lies with the authors.