News ID: 202106
Published: 0544 GMT October 10, 2017

More than half of Londoners in poverty are in working families

More than half of Londoners in poverty are in working families

More than half of the 2.3 million Londoners living in poverty are members of households in which someone is earning money, research has found.

The overall poverty rate in London has fallen slightly from 29 percent to 27 percent over the past six years, because of rising employment levels, but having a job is not enough to protect a huge number of residents from financial hardship, reported the Guardian.

According to a study by the Trust for London, 58 percent of Londoners who are in poverty are living in a working family, the highest this figure has ever been. The proportion is up from 44 percent a decade ago and 28 percent two decades ago.

Mubin Haq, director of policy at the Trust for London, which works to tackle poverty and inequality in the UK capital, said: “Despite record levels of Londoners in work, poverty rates have only nudged down slightly over the last few years. Over 2 million Londoners are struggling to make ends meet. That’s more than the entire populations of Manchester, Liverpool, Bristol and Newcastle combined. The reality remains, that for many work does not pay enough, or offer the security that people need.”

The report also shows that wealth inequality is more extreme than income inequality in London, with the top 10 percent of households owning just over half the city’s wealth, and the bottom 50 percent of households owning 5 percent. The amount of wealth held by the bottom tenth of households decreased by a third in London between 2010–12 and 2012–14, whereas across Great Britain it fell by just 2 percent.

The high cost of housing in the capital largely explains the higher rate of poverty in London (27 percent of Londoners, compared with 21 percent across England). The rising cost of rents and the lack of availability of social housing mean that more people in poverty now live in the private rental sector than in any other kind of housing tenure, nearly 1 million; the number of children living in poverty in this sector has tripled over the past 10 years.

Low pay and insecure employment are both contributory factors. In the last decade, weekly pay in London has fallen, and a larger proportion of people were earning less than £200 a week in 2016 than in 2006, the study showed.

The number of workers in London on temporary contracts was at an all-time high in 2016 (260,000), and the proportion of those on a temporary contract who were looking for full-time work had risen from one in four to one in three in the past decade.

Overall, 700,000 children (37 percent), 1.4 million working-age adults (24 percent) and 200,000 pensioners (19 percent) live beneath the official poverty line. Households whose income after housing and taxes have been deducted is below 60 percebt of the median income are counted as being in poverty, according to the official government definition.

Although the poverty rate has fallen slightly, the number of people living in deep poverty (defined by those surviving on less than 50 percent of median income, rather than 60 percent) has risen by 1.5 percent in the past five years. About 8,100 people were recorded sleeping rough in 2016-17, almost three times the number in 2006. There has also been a huge jump in the number of families living in temporary accommodation, arranged by the local authority. There were 54,000 households in temporary accommodation in the first quarter of 2017, a 48 percent increase on five years previously.

The number of people receiving out-of-work benefits has fallen substantially from the post-recession peak of about 700,000 in 2009 to 470,000 in 2016, but the report notes that only 41 percent of unemployed adults receive unemployment benefit. The number of families affected by the benefit cap has risen from 8,900 to 15,300 since the cap’s threshold was lowered in 2016.

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