More than a million London children are growing up in households with incomes that fall short of what is needed for a “basic but dignified standard of living”, according to a report focussing on the impact on families of the capital’s high housing and childcare costs.
Compiled last autumn by researchers at Loughborough University and funded by Trust for London, the report draws on in-depth interviews with parents from across Greater London to define what it calls “a minimum socially acceptable standard of living” for the capital and calculates how this differs from an equivalent income in other urban areas of the UK.
It finds that 41 per cent of Londoners have incomes less than the Minimum Income Standard compared with 36 per cent in the “urban UK” as a whole, and that 3.7 million of London’s population of approximately nine million people “are living in households with inadequate incomes” including around half of its roughly two million children.
The Minimum Income Standard, a yardstick devised in 2014, is derived from discussions with interviewees about the goods and services hypothetical households similar to their own need in order to not only pay for food, clothing and accommodation but also to take up “the opportunities and choices necessary to participate in society”.
The analysis finds that for almost every type of household, the gap between the amount of money needed to meet the Minimum Income Standard in London and the amount needed in other urban areas has increased since 2018.
The rise has been particularly sharp since 2022 for households with children, whether they contain one parent or two, following a slight closing of the gap between 2018 and 2020. The variations have been more pronounced in Inner London than in Outer London.
The biggest gap, however, has continued to be between single people of working age in London and counterparts elsewhere. The report says that for this group a Minimum Standard Income in Inner London needs to be 70 per cent higher than in the rest of “urban UK” and 45 per cent more in Outer London. The only household category examined that has seen an opposite trend are pensioner couples.
Housing and childcare costs are identified as the two biggest reasons why the Minimum Income Standard level has gone up in absolute as well as in relative terms in London, with an undersupply of homes available at social rent levels singled out, although the report also says that the incomes of four in ten London social renters as well as those of “more than half” of private renters.
A couple with children living in Inner London is said to need to bring in £370 a week more than the average of equivalent households outside the capital, and one in Outer London, £260 more. The higher cost of childcare in Inner London is quantified as £233 more a week in inner London and £83 a week more in Outer London compared with other urban areas.
The report’s release comes amid a campaign in Hackney against a proposed hike in fees at 11 council-run nurseries from September, with a demonstration planned for Monday.
In March, childcare costs across England for children under the age of two fell for the first time in 15 years, according to the children’s charity, Coram, as more government funding came on stream.
However, a London Assembly report published last year found that London parents had been “spending an increasing proportion of their incomes on childcare costs, and these costs are one of several factors that are making it increasingly expensive to raise children in London”.
Read the Minimum Income Standard report here.
OnLondon.co.uk provides unique coverage of the capital’s politics, development and culture with no paywall and no ads. The vast majority of its income comes from individual supporters, who pay £5 a month or £50 a year. They receive in return bespoke newsletters, bargain London event offers and much gratitude. Details HERE. Follow Dave Hill on Bluesky.