New London Poverty Profile shows rises in ‘in work’ and temporary housing hardship

New London Poverty Profile shows rises in ‘in work’ and temporary housing hardship

London continues to have a far higher rate of poverty than the UK average and the proportion of poor adults in households where at least one person has a job has soared in the past five years, a new report has found.

The latest Poverty Profile of London, produced by charity Trust for London and consultancy WPI Economics, draws on a range of official figures to find that 28 per cent of Londoners can be defined as living in poverty – roughly 2.5 million people – compared with a UK average rate of 22 per cent.

In line with a government assessment method, the Profile defines people as being in poverty if they are members of households whose net income in a given financial year is less than 60 per cent of the average UK household income for that year.

The Profile says that nearly three-quarters of London adults “in poverty” are part of “working families”, defined as those in which at least one person has a job in which at least one person has a job – a number in the region of 1,050,000. It finds that the proportion of Londoners in this situation has risen by 62 per cent in the last five years, even though the capital’s employment rate has also risen during that time. There has been a similar rise in the percentage of children in poverty in working families.

Housing costs, which have long been a defining component of London’s poverty issue, devour an average of 56 per cent of poor Londoners’ household net incomes, compared with 37 per cent for poor households in the rest of England. The effects of the capital’s high housing costs can be seen in a rise in the number of London households in temporary accommodation compared with five years ago – an increase of 30 percent to 56,000. Average social and “affordable” rents are roughly 50 per cent higher in London than in England as a whole, while lower quartile market rents were more than double.

These changes have taken place in the context of nearly 20,000 London families being affected by the benefits cap – the ceiling on the total amount of money in benefits that can be provided – compared with 11,350 five years earlier.

The Profile stresses that both the cost of living and poverty rates vary widely across Greater London and so compare differently with the rest of the UK. Costs of living can be anywhere between 15-58 per cent higher in London while child poverty rates are a very high 57 per cent in Tower Hamlets compared with 21 per cent in Sutton and Richmond. A broad split between all-ages poverty rates in Outer London (26 per cent) and Inner London (32 per cent) is also identified.

The Profile notes that against a backdrop of national government ideas about “levelling up” different regions of the UK in terms of economic performance “across several dimensions of poverty and inequality Londoners fare the worst” and that “proximity to wealth does not mean that Londoners can access it”.

Trust for London chair Jeff Hayes writes in his foreword that the Profile, whose data were compiled before the impacts on poverty of the Covid-19 pandemic could be measured, now effectively provides a baseline against which future changes can be measured. Observing that sacrifices made during World War II led to the creation of the welfare state he expresses hope that civil society, business and government “will continue to work together to create a new social settlement that ensures that no one has to live a life of poverty”.

Read the 2020 London Poverty Profile via here. Image from Profile’s cover page.

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