Last year was a difficult one for millions of Londoners. 2024 will continue to bring London’s challenges into sharp focus. Here, we go through 10 charts to help us understand the picture of poverty in London at the start of the year, showing us where our capital’s problems lie and what needs to change to tackle poverty. As 2024 unfolds, we’ll continue to update London’s Poverty Profile with the latest data to give us the clearest picture of what’s happening in London.
1. Falling poverty rate
Proportion of people in poverty over time after housing costs (1996/97 - 2021/22)
The most recent poverty figure for London shows that 25% of people are currently classified as in poverty. This means London’s poverty rate is technically lower than at any other point since the current measure began in 1996/97.
On the surface, this might look like something worth celebrating. But we don’t think it’s good news. London’s falling poverty rate could be a sign that low-income households are being priced out of the city. We hope to provide more insights on this throughout the year.
2. The cost of living
Inflation impact - the estimated percentage change in spending for London households, if buying the same goods and services (April 2020 - October 2023)
2023 was, to a large extent, characterised by the cost-of-living crisis. Inflation has fallen from its peak of 9.6% in 2022.
But as this chart shows, living costs remain significantly higher than they did before the pandemic – and low-income households are being impacted the most.
3. A city of contrasts
Proportion of children in poverty before and after housing costs by London borough (2021/22)
People’s life chances can vary dramatically from one borough to the next. A child born in Wandsworth is more than twice as likely to be growing up in poverty than a child in neighbouring Richmond. And in Tower Hamlets, across the city, they’re four times more likely to be in poverty.
4. Wealth inequality
Proportion of population within the bottom and top 10% of the income distribution after housing costs by region (2021/22)
London is deeply unequal – more so than any other part of the country. This chart shows that London has a higher proportion of people on the highest incomes than any other region of England – but it also has the joint highest proportion of people on the lowest incomes.
5. The homelessness crisis
People sleeping rough by London Plan area (2008/09 - 2022/23)
In 2022/23, more than 10,000 people were seen sleeping rough on the streets of London.
This is more than double the number of people since 2010. And in the last year, every borough but two (Wandsworth and Barnet) has seen an increase in the number of rough sleepers.
6. Temporary accommodation
Temporary accommodation types in London (2002-2023 Q1)
The number of rough sleepers in London only scratches the surface of our city’s problem with homelessness. Last year, more than 60,000 households in London were homeless and in temporary accommodation. Every London borough that we have data for except one, has a higher proportion of residents in TA than the England average.
People are placed in TA by their local authority when they become homeless. As the name signals, TA was only ever designed to be just that, temporary. But people are often stuck in TA for a year or more.
7. High housing costs
Monthly rent by sector in London and England (2020/21)
A home in London is unaffordable for many of its residents. Across all rental sectors, a one-bed costs significantly more than in the rest of England.
A one-bed in the lower quartile of the private market (i.e. a property that is more affordable than 75% of others in London) costs more than double. Social renting is also much more expensive in London, with a median one-bed costing about 34% more than in the rest of England.
8. Working poverty
Employment status of all adults aged 16+ in poverty (2011/12 - 2021/22)
More than half of Londoners in poverty are in work. This is not the case in the rest of England.
This often surprises people. Employment is meant to be the best route of poverty – but for many, it’s not enough. This highlights both the high levels of low pay and the extortionate cost of living in London.
Proportion of Londoners aged 16-64 receiving out-of-work benefits by benefit type (2014-2023 Q2)
12.9% of Londoners are out of work and on benefits. This has increased significantly since before the pandemic.
On top of this, due to high levels of low pay across London and high living costs, many working Londoners are relying on benefits. Far too often, people relying on social security payments can’t make ends meet.
10. Racial inequality
London is the most diverse part of the UK. But racial inequality is also a key part of life in the city. Black Londoners are more than twice as likely to be in poverty than White Londoners.
This data comes from London’s poverty profile, our regularly updated resource to help us understand poverty and inequality in London.