Income and Poverty

London's Poverty Profile 2017

Commissioned by: Trust for London

  • Published 9th Oct 2017
  • Authors: Karen Barker, , Theo Barry Born, , Carla Ayrton, , Otis Long, , Adam Tinson,
  • Category: Income and Poverty

Key findings

  • The proportion of Londoners living in poverty after housing costs are taken into account has fallen from 29% to 27% over the last six years. In the rest of England, the latest figure is 21%. The cost of housing is the main factor explaining London’s higher poverty rate.
  • The majority of people living in poverty (58%) are living in a working family. Partly due to rising employment, the number has risen to 1.3 million over the last decade, an increase of around 50%.
  • More people in poverty live in the private rented sector than any other housing tenure, nearly 1 million. This marks a large shift from 2009/10, when it was the tenure with the fewest people in poverty. The number of children living in poverty in this sector has tripled over the last decade.
  • Wealth inequality is more pronounced than income inequality in London. The top 10% of households received nearly 30% of income but owned just over 50% of total wealth. The bottom 50% of Londoners received nearly 25% of income but owned only 5% of wealth.
  • While income inequality has declined over the last five years, wealth inequality has increased.
  • Unemployment fell to 280,000 in 2016, far lower than its peak in 2011 at 430,000. The number of workless households is at a historically low level.
  • 21% of employees are paid below the London Living Wage, compared with 22% a year earlier. This was the first year without an increase since 2009.
  • 8% of working-age adults are receiving an out-of-work benefit. Five years earlier, this was 12%.
  • Sanctions (ESA, UC and JSA) have fallen to 40,000 in London compared with a peak of more than 130,000 in 2012. The sanction rate for JSA had been 5% and is now 2% of claimants. However, the sanction rate for UC is 6%.
  • The net increase of 6,700 affordable homes in 2015/16 represented just under 40% of the London Plan target of 17,000 a year. Only 1 in 4 new home completions were affordable.
  • Local authority rents in both London and England have increased more rapidly than private rents over the last five years (around 30%). Over a similar period, the number of children in a social rented home and living in poverty has increased by 40,000 in London.
  • Seven in ten households in temporary accommodation in England are in London. Over 80% of these households contained children.
  • The difference between the proportion of disadvantaged pupils and the proportion of all other pupils attaining an A* to C in maths and English GCSE at 16 (the attainment gap) in Inner London is almost half (16 percentage points) of the attainment gap in the rest of England (30 percentage points).
  • Disadvantaged students from Inner London are more likely to attend higher educational institutions than other students (nearly 60% do so), but are less likely than non-disadvantaged students to attend Russell Group universities.
  • In just over a decade, London has gone from having a higher infant mortality rate than England to a lower infant mortality rate. This is a fall of around 40%.