Poverty in London 2015/16

Official government figures show that the total number of Londoners living in poverty has risen a little over the last few years with the growing population and now stands at around 2.3 million people. In percentage terms, the rate has stayed the same, at 27 per cent of all those living in the region, averaged over three years 2013/14-2015/16.

The main poverty measure used is based on current income and is called relative poverty, so people living in households with equivalised income below 60 per cent of the national median (midpoint). The poverty level for 2015/16 equates, for a couple with no children, to around £248 per week, counting all income and deducting taxes and basic housing costs. This is known as relative poverty after housing costs (AHC). However, there are different ways to measure poverty, and this brief analysis outlines some of the key findings on those different measures for London. More detail on the poverty measures, income levels and income inequality is given in a GLA Intelligence Update which can be found https://data.london.gov.uk/dataset/hbai-poverty.

The poverty level in London has changed little over the two decades that these data have been collected and now stands at 27 per cent. This is higher than in any other region or part of the UK, at six percentage points above the national figure. Poverty levels in Inner London remain significantly higher, at 31 per cent, while the Outer London rate has always been only a little higher than elsewhere. Notably, the West Midlands rate has increased in recent years, while the rate for Outer London decreased marginally so they are now the same (24 per cent).

In contrast, the poverty rate in London, counting all income and deducting taxes but before taking housing costs into account (BHC), has tracked the national rate closely, falling a little over the longer term and now appears to have fallen below the national figure. Median income in London is much higher than the national figure at £524 per week (BHC) compared with £471 nationally. Only the South East region is higher than London. However, the costs of housing in London are significantly higher than elsewhere, so that the median figure matches the national figure of £400 per week after accounting for housing costs.

 

Change in overall poverty (all individuals) for London and UK (three year rolling averages) 1994/95 to 2015/16

While the poverty rate has not changed, the number of people in poverty has increased nationally in each of the last two years, up half a million people AHC to 14 million, but the number for London (which are three year averages) has risen marginally from 2.2 million in 2011/12-2013/14 to 2.3 million in 2013/14-2015/16.

Poverty rates vary across the population according to different attributes. Children are more likely to be living in poverty than adults overall, with 37 per cent of London’s children (around 700,000) in poverty (17 per cent BHC). These figures are the same as for the previous year, remaining at their lowest level since the data series began in 1994/5. At the same time, the rates have increased nationally, so that the comparable (three year average for 2013/14-2015/16) figures for the UK are 29 per cent AHC and 19 per cent BHC. After housing costs, 42 per cent of Inner London children are living in poverty and 34 per cent in Outer London, still well above the UK figure. For some children, their experience of poverty may be relatively short term, but many children in poverty stay in poverty. More than one in five children in London are counted as being in persistent poverty.

Most children in poverty live in a working household. This does not mean that children in workless households are not in poverty – children in households with no one in work are more likely to be in poverty than those in working households. However, there are relatively few workless households with children and the overwhelming majority of children live in working households, so around two in three children in poverty across the UK live in working households.

Material deprivation – when people cannot afford what are commonly regarded as essentials for life in Britain – affects many London children. Low income and material deprivation affects one in eight, while the level of severe low income and material deprivation is lower, at around one in twenty. This nevertheless translates to over 100,000 of the capital’s children living in families with income below half of that of the average family and going without the normal necessities.

 

Low income and material deprivation levels among children by region: (three year average) 2013/14 to 2015/16

Poverty among working age people in the UK has shown relatively little change over twenty years. In London, the poverty rates for this age group have hovered around one in four, which is well above the national figure. This represents 1.4 million working age Londoners living in relative poverty after taking their housing costs into account. Around half of working age Londoners in poverty might be classified as in persistent poverty.

 

Working age poverty rates in London and UK: 2013/14-2015/16

High housing costs also make London pensioners more likely to be in poverty. In contrast, in the rest of the UK, pensioners are more likely to be counted as in poverty using the before housing costs measure than after housing costs are taken into account. Almost one in five people over retirement age living in London has income below the poverty line. Around half this number (one in ten) are classified as in persistent poverty, having been counted as living in poverty in at least three years out of the last four.

Material deprivation among older Londoners is much higher than in other parts of the UK, with 14 per cent of all pensioners in London unable to afford or being prevented by health or disability issues or social isolation from having such necessities as a damp-free home, access to a telephone or having hair cut regularly. This rises to 21 per cent in Inner London.

 

Material deprivation levels among people of pensionable age by region: (three year average) 2013/14 to 2015/16

For further analysis and detailed definitions, see the GLA Intelligence Update at https://data.london.gov.uk/dataset/hbai-poverty.

 

[1] Adjusted for household size and composition