Four in ten Londoners exist below minimum income standard, says new report

The number of Londoners who can’t afford the public’s definition of a decent standard of living has risen to 3.5 million according to new research and includes over one million children.

The total represents 41% of the capital’s population of more than 8.6 million whose budgets do not meet a minimum income standard set according to what Londoners themselves regard as the basic requirements for participating in society, a rise of 400,000 since 2010/11

The increase in those falling below the standard, which covers what the researchers from Loughborough University call “needs, not wants, necessities, not luxuries”, has been driven primarily by a rise in the cost of private renting, with more expensive childcare and public transport also contributing, according to the report.

It says that properties for rent at the cheaper end of the private market have gone up exceptionally fast in the last two years, pulling more single working age people in particular below the minimum income standard level. The benefit cap, the ceiling on tax credit for childcare and private sector housing benefit changes have also had effects.

The report, funded by the charity Trust for London, finds substantial variations in the groups of Londoners who exist below the minimum income standard, with 57% (over one million) of the city’s children affected, along with 39% of all its working-age adults (over two million) and 27% of its pensioners (300,000). The figure for children rises to 83% among lone parent households.

The findings underline London’s much higher cost of living compared with the rest of the UK, especially for single, working age adults. In Inner London this is put at a striking 56% higher than the rest of the country and 39% higher in Outer London, with private sector rents the key factor. A single person needs to be earning £21,700 a year if sharing accommodation in Inner London (or £29,633 in a studio flat by themselves) and £20,600 in Outer London.

For a couple with two children, the cost of living differences with the rest of the UK are calculated to be 18% higher in Inner London and 21% higher in Outer London, strongly influenced by childcare costs, and 30% and 17% respectively for pensioners.

The minimum income standard level for London was set following detailed discussions with a sample of 88 Londoners, who arrived at a definition of “having what you need in order to have the opportunities and choices necessary to participate in society” appropriate to the capital.

This included being able to buy a birthday present for a child and occasionally go out for meal with friends and workmates and judged a flat to be the minimum acceptable accommodation in London, in contrast to a house in the rest of the UK. It also gave greater weight to public transport costs in London, where a car is considered less than essential.

The report calls for action to bring down costs and improve incomes through better wages supported by adequate in-work benefits, stressing that in London hikes in private rent levels alone can wipe out any gains from the introduction of the national living wage.

Lead researcher Matt Padley said the report’s findings “can help policymakers explore the impact of particular costs in London,” and commended London Mayor Sadiq Khan’s commitment to providing more affordable housing. Trust for London’s director of policy and grants, Mubin Haq, called for “welfare benefits which provide more of a safety net” and more employers paying the voluntary London Living Wage, which is higher than the national minimum, reflecting London’s higher living costs.

The full report and its key findings can be read via Trust for London’s website and an online calculator enabling Londoners to find out if they receive enough to meet the London minimum income standard is here.

 

 

 

 

 

 

 

 

 

 

1 Comment

  1. This is down to de-industrialisation of London. The site where the Olympics where held, used to employ 5,000 people. These jobs have been relocated and many companies chose to leave the capital. Replacing light industry with Olympic stadium is hardly going to create quality jobs…..

    Councils are relentless in the drive in introduction of Controlled Parking Zones, I have seen a huge number of businesses just disappears. Some move to industrial units, but not all can afford the relocation costs. There is a conflict of interest, the councils want to earn money from parking spaces, but they have no interest a carpentry workshop is driven out. In nice neighbours, we end up with coffee shops and in poorer areas we end up with fried chicken kebab shops….

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