26% of Londoners are living in poverty. That’s around 2.3 million people, equivalent to twice the population of Birmingham. In this blog, we unpack the latest data, explore which groups are most affected, and how London is different to the rest of the UK.
Poverty in London has increased
Last year, we reported that London’s poverty rate had fallen to its lowest on record. That’s no longer the case. Poverty in London has now risen and the city once again has the highest poverty rate in the country. In contrast, poverty levels in the rest of the country have remained relatively static.
Poverty rates by region (2023/24)
26% of Londoners are in poverty – up from 24% last year. This means there are 160k more people in poverty than last year, both before and after housing costs are taken into account.
Why is poverty in London increasing?
The key reason for London’s high poverty rate is the cost of housing. The city goes from having one of the lowest poverty rates in the country before we take housing costs into account (15%), to the highest when we do (26%).
But this year poverty has gone up by 2% - and we see this increase both when we do take housing costs into account (from 24% to 26%), and when we don’t (from13% to 15%).
This could be a statistical anomaly. Or it could indicate that poverty is rising again – and that it’s being driven by something other than housing. This could be caused by a number of factors. For example, if more people are out of work and relying on benefits, the number of people in poverty will increase, because benefit levels aren’t high enough to meet the cost of living.
Who is in poverty in London?
Poverty doesn’t affect everyone equally. Some groups in London are significantly more likely to be in poverty than others.
Poverty rates by age
Poverty for children, pensioners and working-age adults (2013/2014 and 2023/2024)
More than one in three (35%) children in London are growing up in poverty. This is higher than the average across the rest of England (29%). But in London, child poverty has decreased in the last decade, while it’s increased in the rest of the country.
Over the same time frame, we’ve seen an increase in pensioner poverty, a trend that is mirrored across England as a whole.
Disability and poverty
Proportion of Londoners in poverty in families with and without disabled persons (2013/14, 2018/19, and 2023/24)
Households in London with a disabled family member have a poverty rate of 31%, more than households without a disabled family member (24%).
Poverty rates by ethnicity
Proportion of households in poverty by ethnicity (2023/24)
Poverty rates vary significantly across different ethnic groups. Bangladeshi Londoners are by far the most likely group to be in poverty. 62% of this group were in poverty in 2023/24 - a massive 20 percentage points higher than any other group shown here.
White Londoners are the least likely to be in poverty, with a poverty rate of 18%. Every ethnic group shown here except for Chinese, Mixed and Indian Londoners is at least twice as likely to be in poverty than White Londoners.
However, when looking at the raw numbers, around 41% of all people in poverty are White – nearly 1m people.
Different household types
Workless families, and single families with children, have the highest poverty rates overall. More than half of both groups are living in poverty.
An important trend: Poverty in the private rented sector
Number of people in London in poverty by housing tenure (2004/05 - 2023/24)
Nearly a million (950,000) Londoners living in the private rented sector are in poverty. This is one of the biggest changes we’ve seen in London in the last two decades – the number of private renters in poverty has more than doubled in London, from 430,000 in 2004/05.
This isn’t because the proportion of private renters in poverty has increased dramatically – but because, simply, many more Londoners rely on private rented housing than they did 20 years ago.
There are two reasons behind this: the cost of buying a home, meaning ownership is out of reach for many and a lack of social housing. With more than 300,000 households in London on social housing waiting lists, many people on low incomes have no choice but to rely on expensive private rented accommodation. Extortionate housing costs are the key driver of London’s high poverty rate.
What does all of this mean?
At a top level, this latest data reaffirms our mission. More than two million Londoners are living in poverty – a shockingly high number, especially in one of the world’s wealthiest cities.
The key reason for this is the cost of living in the capital, and it’s vital that the government invests in vastly more social homes if it wants to help lift people out of poverty.
In terms of how the picture of poverty is changing, things are a little more complicated. For the last two years, poverty has been the lowest on record and poverty in London has been eclipsed by poverty in other English regions.
That led us to speculate that perhaps Londoners in poverty were being priced out at an increasing rate. Earlier this year we published analysis into gentrification in London, exploring how populations were significantly changing in parts of London – and we’ll continue to look into this trend.
But this year, poverty has gone up. Both things can be true at once: people on low-incomes are being priced out of London in large numbers while, at the same time, more people are being dragged into poverty by the ever increasing cost of living here.
Right now, we’re not sure exactly what’s driving the changes. But we’ll continue to share the latest data, analysis and insight on London’s Poverty Profile, so that we can understand what’s happening in our city.
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