London’s poverty rate may have fallen slightly pre-cost of living crisis

London’s poverty rate may have fallen slightly pre-cost of living crisis

The overall level of poverty in London might have slightly fallen in recent years, mostly prior to the cost of living crisis, according to estimates newly-compiled by the Greater London Authority (GLA).

Official figures show that over the three-year period to 31 March 2022, there were 25 per cent of the capital’s members of households with incomes below 60 per cent of the midpoint of the national income range, a widely-recognised measure of “relative poverty”, compared to the previous three-year figure of 27 per cent.

The new figure, which incorporates London’s high housing costs, equates to about 2.2 million Londoners falling below the relative poverty threshold, down from 2.4 million. The GLA says the threshold income figure by this assessment is about £300 a week for a couple with no children.

Around 700,000 of the London household members concerned are children, representing approximately one in three of the capital’s total number. The GLA says poverty levels fell among all age groups in London during the 2019/20 to 2021/22 period, though it warns that the data for 2020/21 were “so badly impacted by the pandemic” that the Department for Work and Pensions (DWP), which publishes them, “have decided to exclude that year’s data from all regional estimates.”

The estimates suggest that London as a whole has ceased to have the highest poverty rates of any English region, as the figure for the West Midlands is high at 27 per cent and that for the North East is the same as London’s overall, although at 29 per cent the rate for Inner London is higher and affects 800,000 people. The rate in Outer London, where a larger number of Londoners live, is put at 23 per cent, equating to 1.4 million people. London’s overall rate continues to be higher than those of Scotland, Wales and Northern Ireland too.

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The GLA says the data it has used “pre-date the bulk of the cost of living crisis, which started in late 2021, so although some costs had started to increase during the financial year 2021/22, many people would have been on fixed contracts for rent or mortgage interest payments etc, so the full effects of the crisis on disposable income, including wage increases, would not be included”.

The figures underline the significance of housing costs in the capital, with the GLA report explaining that “the poverty rate in London, counting all income and deducting taxes but before taking housing costs into account…is now among the lowest of any region, alongside neighbours East and South East, at 14 per cent”.

The report adds: “Nearly one in five Londoners live in a household with less than half the national median income, that is in households with equivalised weekly income after housing costs of less than £250 per week. This proportion of 18 per cent (compared with 15 per cent nationally) live in what is sometimes termed ‘severe income poverty’. Together, these illustrate the much greater levels of income inequality in London than [are] found elsewhere in the UK.”

The GLA report also draws on separate DWP estimates of the number of children in poverty in small areas across Great Britain. “While there are many areas [of London] with relatively low levels of child poverty, below one in twelve children, the areas with at least one in four children in poverty are spread across London, from Barking and Dagenham in the east to Hillingdon in the west and Haringey in the north to Croydon in the south,” the report says, adding that there are still clusters of areas with significant levels of child poverty even before housing costs are taken into account in Tower Hamlets, Hackney, Camden and Newham.

Read the GLA poverty report in full here

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