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Working-age adults

Key points

  • The number of working-age adults in poverty in London has increased from 1.1 million to 1.4 million in the past decade.
  • While the proportion of workless households has fallen significantly, most of the rise in working households is among those where not all adults work full-time.
  • Overall, nearly one-in-five jobs in London were low-paid in 2014, almost double the proportion that was low paid in 2005. Part time jobs are significantly more likely to be low paid than full time.

Commentary

As London's economy has grown, more people live in working households. This is positive of course as earnings improve people's material wellbeing. However, increasingly work does not provide sufficient income to lift people out of poverty, particularly when those jobs are part-time, low paid or both. While worklessness has been falling, the rise in working-age poverty over the past decade is testament to this problem.

The new National Living Wage will increase the earnings of the lowest paid in London. But the impact will be limited given London's high costs - the planned wage rate for 2020 is below the current London Living Wage.

Working age adults are defined as those between 16 and 65 year olds. It therefore includes 16-24 year olds.

Poverty

In the decade to 2013/14, the proportion of working-age adults in poverty grew 3 percentage points in London to 26%; and 2 percentage points in the rest of England to 20%. This contrasts with a falling poverty rate for both children and pensioners.

The number of working-age adults in poverty in London has increased from 1.1 million to 1.4 million in the past decade. Almost all of this has been in working families (up from 490,000 to 790,000), while the number of adults in workless families has remained fairly steady (from 560,000 to 590,000).

Find out more about poverty and age

Work

The proportion of people in workless households has decreased, falling from around 15%-18% in the late 1990s to now under 10%.

Meanwhile, there has also been a growth in households where some but not all adults work (known as "part-working" households). Between the 1990s and 2007, people in these households made up around 35% to 38% of the total number of households. However, since the recession, these have grown considerably and in recent years these households account for almost half of the total. This is significant as these households are more likely to be susceptible to in-work poverty. There were 2.7 million people in these households in 2014, up by around one million compared with 15 years previous.

Find out more about poverty and work.

Pay

Overall, nearly 1 in 5 jobs in London were low-paid in 2014, almost double the proportion that were low-paid in 2005. There is significant variation by whether the work is part-time or full-time. 43% of part-time jobs were paid below the London Living Wage, an increase of nearly 5 percentage points from 2013, while the proportion of full-time jobs that are low-paid increased by 0.6 percentage points to just over 11%.

Find out more about low pay

Benefits

At the end of 2014, 525,000 people in London were claiming an out-of-work benefit. This has been falling since the post-recession peak of 690,000 in 2009 and this fall has been faster in London than the average for the rest of England.

Out-of-work benefit claims are highest in East London, particularly Enfield, Haringey, Hackney and Tower Hamlets, along with Newham and Barking & Dagenham, although many of these areas have seen significant falls in the number of claims in the last five years. All boroughs except for Richmond and Kingston contained areas with more than 10% of working-age people claiming an out-of-work benefit.

Find out more about out-of-work benefits