London is one of the richest cities in the world. But millions of people that call the capital home don’t get to see the benefits of its prosperity. One in four Londoners live in poverty, and our data shows that poverty has remained stubbornly high for over twenty years.
So why, in a city with more billionaires than any other, do so many people struggle to get by? And what can we do about it?
Proportion of people in poverty over time after housing costs (1996/97 - 2019/20)
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.
The cost of living in London
Every region has its own local dimensions to poverty. In London, poverty is made worse by the extortionate cost of living here.
For the last twenty years, London has consistently had the highest rate of poverty in the country. This isn’t because London attracts people in poverty – it’s because it’s unfairly expensive. In particular, housing costs push millions of Londoners into poverty.
Simply, London doesn’t have enough homes. A lack of social housing means that Londoners need to rely on expensive private rented accommodation. Rent on its own can come to a huge portion of someone’s income. In every London borough, the average rent of a one-bed flat costs at least 35% of the city’s median salary.
Extortionate rents and London’s reliance on the rental market mean that millions of Londoners on incomes considered decent are squeezed hard. A poll in January 2023 found 80% of London’s tenants said they were struggling to pay their rent.
It’s not just about high costs – homes in London can often be poor quality. 16% of Londoners live in poor quality housing – more than any other region in the UK. Of those privately renting, 15% live in overcrowded conditions.
London’s problem with low pay
Paid work plays a vital part in lifting people out of poverty. But in London, almost half of people in poverty are already in employment. This is because so many jobs do not pay a decent wage. That’s why we need more good quality, fulfilling jobs that pay at least the London Living Wage.
In 2022, 17% of Londoners in work were paid below the London Living Wage. This means almost one in five working Londoners were paid an hourly wage below what it costs for an acceptable standard of living.
And if you’re in a cycle of low-pay, it can be hard to get out of it. Many low-paid jobs suffer a lack of progression. And many Londoners struggle to find enough work. 10% of Londoners want to work more than they currently do – either because they can’t find the opportunity, or are unable to work.
The cost-of-living
London’s problem with low-paid work means that millions of households are on the edge, trapped in a cycle of living pay-check to pay-check, only able to afford the essentials.
Our data shows how spending habits differ between people who are living in poverty and those who aren’t. In the three years leading to March 2020, households in poverty in London spent almost half (47%) of their weekly expenditure on three essential categories: rent, food and energy bills. For households not in poverty, the figure was 23%.
Paid work plays a vital part in lifting people out of poverty. But in London, almost half of people in poverty are already in employment. This is because so many jobs do not pay a decent wage. That’s why we need more good quality, fulfilling jobs that pay at least the London Living Wage.
In 2022, 17% of Londoners in work were paid below the London Living Wage. This means almost one in five working Londoners were paid an hourly wage below what it costs for an acceptable standard of living.
And if you’re in a cycle of low-pay, it can be hard to get out of it. Many low-paid jobs suffer a lack of progression. And many Londoners struggle to find enough work. 10% of Londoners want to work more than they currently do – either because they can’t find the opportunity, or are unable to work.
