More than half of London’s 2.3 million in poverty are in working families, says report

by Dave Hill

Greater London continues to have a higher poverty rate than the rest of England despite a fall in unemployment in the capital, according to government figures compiled for a new report.

The latest update of London’s Poverty Profile, produced by the Trust for London charity and researchers of the New Policy Institute, finds that the proportion of Londoners living in poverty has fallen from 29% to 27% over the last six years but remains considerably higher than the 21% for England outside the capital.

The profile also finds that the majority of the 2.3 million people defined as living in poverty in London, 58% of them, are members of a family where someone has a job. The number of Londoners, 1.3 million, enduring “in work poverty” is found to have doubled over the past decade.

The rise is attributed to a reduction in unemployment, with the proportion of people in households where no adult works down to 8%, the lowest figure yet recorded. However, the profile concludes that the concurrent rise in in-work poverty “shows that work does not always protect against poverty,” with low pay, “underemployment” and insecure work alongside rising living costs and “the falling value of benefits such as tax credits and housing benefit” adding to “the risk of poverty for people in working families”.

The number of Londoners on temporary work contracts was at an all-time high of 260,00, of which one third would prefer a permanent one. Unemployment in London fell to 280,000 in 2016 compared with a 2011 peak for 430,000. However, 21% of London employees are paid less than the London Living Wage, a slight fall compared with a year earlier, which is the first time that has happened since 2009.

The incidence of poverty varies across the age range, with 37% of children (700,000), 24% of working age adults (1.4 million) and 19% of pensioners (200,000) meeting the “in poverty” definition used in the profile, which is a household income of 60% or less of the national median income. This is a widely used measure of “relative poverty” designating people who can’t afford the activities and opportunities most enjoy.

The profile finds that every one of London’s 32 boroughs, however affluent as a whole, contains areas where the poverty rate is above the rest of England average.

High housing costs are described as “the main factor explaining London’s higher poverty rate”. Were housing costs not accounted for in the figures, London’s poverty rate in recent years would be lower than the rest of England’s at 14% compared with 16%.

Reductions in local housing allowance (housing benefit in the private rented sector), the capping of benefits and the so-called “bedroom tax” have “led to a significant reduction in income for many low-income households in London, working and non-working alike, the profile says.

It adds that “these welfare changes are likely to be the key driver of the increase in the number of people experiencing deeper poverty, despite a decline in overall poverty [from 29% to 27% over the last six years]”,  revealing the proportion of Londoners whose household income is 50% or less of median income has increased over the last five years while the proportion on 60% or less has been slightly falling.

Nearly one million people or 43% of Londoners in poverty are housed in the private rented accommodation, which is more than in any other tenure type. The profile says this marks a large shift compared with 2009/10, when it was the sector with the fewest people in poverty. A further 36% are social renters.

The profile notes that social rents in London, while far lower private rents, have risen more quickly over the past five years. While private rents have gone up by 20%, housing association social rents have risen by 26% and council social rents by 30% across the capital as a whole.

London’s Poverty Profile 2017 can be read in full via here.

Be the first to comment

Leave a Reply

Your email address will not be published.


*