Majority of working-age adults and children living in poverty in capital are from working families, finds London Poverty Profile
Almost a third of Londoners are living in poverty and an increasing number of those are in households where someone is in work, according to new research mapping the face of poverty in the capital.
The study shows that 28% of people in London are in poverty, a figure seven percentage points higher than the rest of England, and the majority of working-age adults and children in poverty – 57% – in the capital are in families that work.
At the turn of the century, 60% of children and adults in poverty lived in workless families. The number of people in in-work poverty rose by 440,000 over the 10 years to 2011-12, according to the study, the London Poverty Profile report, published on Monday by the New Policy Institute in conjunction with the Trust for London.
The report’s findings are at odds with the principle underlying the government’s welfare reform programme, which is that work is the best solution for poverty. “You don’t help people by leaving them stuck on welfare … but by helping them stand on their own two feet. Why? Because the best way out of poverty is work – and the dignity that brings,” David Cameron said in his Conservative party conference speech last month.
It is also becoming harder for part-time workers in London to increase their hours, the report reveals. Those working part-time because they could not find full-time work almost doubled over five years, from 100,000 to 190,000.
The report also highlights a growing problem with low pay, revealing shows that almost one in five Londoners were paid below the London living wage in 2012, a rate above the statutory minimum wage paid voluntarily by employers, currently set at £8.55 for London. There are about 600,000 people in low-paid jobs in London, a 40% increase over the past five years.
Bharat Mehta, chief executive of Trust for London, said: “Work on its own is not a solution to London’s poverty because of the growing number of low-paid jobs. The majority of working-age adults and children in poverty are now in families that work. Londoners are trying hard but are getting stuck; with many being impacted by high housing costs, low pay and limited career progression.
“London’s economy may be doing better than the rest of the country but that obscures the fact it has the highest poverty rate.”
The research also shows poverty is shifting geographically from the centre of London to the outskirts, as rents in central London become unaffordable and housing benefit caps force people to relocate to cheaper, less central areas. About 58% of the 2.1 million people in poverty in London now live in outer London, whereas 10 years ago it was 50%.
But outer London is also becoming unaffordable for some families reliant on housing benefits. Changes to the benefit system, including the benefit cap and reductions to the housing benefit allowances, mean that 13 of London’s 19 outer boroughs are now unaffordable for families who receive housing benefit.
The increase in private rents in London means the number of people living in poverty in the private rented sector has more than doubled over the past 10 years; 43% (830,000) of people who rent from private landlords are in poverty, more than any other kind of tenure.