In this blog, 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 2025 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. A third of children are growing up in poverty
Proportion of children in poverty before and after housing costs by London borough (2022/23)
A third of children in London are growing up in poverty. In some boroughs, this is much higher - in Tower Hamlets, almost half (48%) of children are growing up in poverty.
Growing up in poverty damages children’s life chances, health and wellbeing.
Throughout 2025 a key debate will be around the two child limit. This policy caps the number of children that families can receive means-tested benefits for at two. In total the two-child policy affects 1.6 million children in the UK, and pushes many children into poverty.
If the government chooses to end this policy in 2025, it could mean a more positive outlook for 2026.
2. Falling overall poverty rate - but is this good news?
Proportion of people in poverty over time after housing costs (1996/97 - 2022/23)
Overall, 24% of Londoners are in poverty. This is a huge number - around 2.2m people, nearly double the size of Birmingham.
But it also means that London's poverty rate is now the lowest on record.
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.
3. High housing costs
Monthly rent by sector in London and England (2022/23)
Every region has its own characteristics when it comes to poverty. For London, high housing costs are a central issue.
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 almost 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.
4. The homelessness crisis
People sleeping rough in London (2008/09 - 2023/24)
Partly because of the extortionate cost of housing, London is at the centre of the country's homelessness crisis. The number of people seen sleeping rough in London has more than tripled since 2008/09, 15 years ago. In 2023/24, nearly 12,000 people were seen sleeping rough on the streets of London.
And in the last year almost every London borough (28 out of 33) has seen an increase in the number of people sleeping rough. In some boroughs rough sleeping has increased significantly - such as in Hammersmith and Fulham, where the number of people sleeping rough has nearly doubled.
5. Temporary accommodation
Total number of households in Temporary Accommodation (2011-2022) (2011-2023)
The number of rough sleepers in London is a stark and visible representation of our city’s problem with homelessness. But behind closed doors there's an even more widespread crisis. In 2023, the last full year we have data for, more than 60,000 households in London were homeless and in temporary accommodation (TA). Every London borough that we have data for has a higher proportion of residents in TA than the England average.
People are put in TA by their local authority when they become officially homeless. As the name signals, TA was only ever designed to be just that, temporary. But people are often stuck in TA for long stretches of time, which can have damaging impacts on their health and wellbeing.
6. 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 2024)
One of the biggest issues facing Londoners in 2025 will be the high cost of living. Inflation is much lower than its peak during 2022. But as this chart shows, costs remain extremely high - and low-income households are being impacted the most.
To buy the same goods and services as they did before the pandemic, it would now cost a lower-income household in London 29% more.
7. A city of contrasts
Life expectancy at birth by borough for men and women (2020 to 2022)
People’s life chances can vary dramatically from one borough to the next. As we've seen earlier, a child born in Wandsworth is more than twice as likely to be growing up in poverty than a child in neighbouring Richmond - and a child born in Tower Hamlets is four times more likely.
This inequality is reflected in the health of London's residents, too. A woman born in Kensington & Chelsea can expect to live for 86 years, six years longer than a woman born across the city, in Barking & Dagenham.
8. Out-of-work benefits
Proportion of Londoners aged 16-64 receiving out-of-work benefits by benefit type (2013-2024 Q2)
13.5% of Londoners are out of work and on benefits. This has increased in the last year, almost to the level seen during the COVID-19 pandemic. The proportion of Londoners out-of-work and on benefits is significantly higher than before the pandemic.
There are many reasons that someone might be out of work and need to rely on benefits - such as sickness or caring responsibilities. But because benefit levels are so low, many people relying on social security payments can’t make ends meet, or even afford the essentials.
9. Working poverty
Employment status of all adults aged 16+ in poverty (2011/12 - 2022/23)
It's not just people who are out of work that face hardship. More than half of Londoners in poverty are in work.
This often surprises people. Employment is meant to be the best route of poverty – but for many, it’s not enough.
This isn't the case in the rest of England, where the majority of people in poverty are either unemployed or economically inactive. This highlights both the high levels of low pay and the extortionate cost of living in London.
10. Racial inequality
Proportion of households in poverty by ethnicity (2022/23)
London is the most diverse part of the UK. But racial inequality is also a key part of life in the city.
Black and ethnic minority (BME) Londoners are significantly more likely to be in poverty than white Londoners. 34% of BME Londoners were in poverty in 2022/23 - double the proportion of white Londoners (17%).
Bangladeshi Londoners are the group with the highest poverty rate. 63% of this group were in poverty in 2022/23 - a massive 20 percentage points higher than any other group shown here, and more than 40 percentage points higher than white Londoners.
This data comes from London’s poverty profile, our regularly updated resource to help us understand poverty and inequality in London.