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Low income

Key points

  • In the three years to 2013/14, 27% of people in London were in poverty after housing costs (AHC) were taken into account, 7 percentage points higher than the rest of England.
  • Inner London has a higher poverty rate than Outer London which in turn was higher than the rest of England.
  • The poverty rate for working-age adults in London has risen slightly over the last ten years. But the pensioner poverty rate has seen a significant fall.
  • In the three years to 2013/14, 2.25 million people were in poverty in London, only slightly higher than a decade earlier, the majority (1.3 million) live in Outer London.
  • A fifth (21%) of people in working families in London are in poverty, higher than the rest of England and London a decade ago. As both the number of people in working families and the in-work poverty rate have increased, most (60%) non-pensioners in poverty in London live in a working family.
  • At 860,000 there are more private renters in poverty than social renters or owners; a decade ago it was the least common tenure among those in poverty.
  • 55% of children in poverty in London are materially deprived (that is, they lack multiple basic items due to cost). 20% of people in poverty in London are behind with a bill.

The poverty thresholds and Minimum Income Standard (£ per week)

How is poverty (low income) defined?

Income is measured at the household level after tax (council tax, income tax and national insurance) and adjusted to reflect the household size. The official definition of poverty, used across the EU, is having a household income that is less than 60% of the national median.

The table above shows the poverty thresholds for different family types in 2013/14. It shows the thresholds for income measured before and after housing costs and how they compare with the Minimum Income Standard for London (which is the income that people need in order to reach a minimum socially acceptable standard of living in the London, based on what members of the public think).


In recent years the government has announced its intention to replace the official measure of child poverty used throughout this report (which looks at those with a household income considerably below what is normal in society) with other measures that focus on the causes of poverty. Two measures mentioned by government in its Child Poverty Strategy 2014-17 are the proportion of children living in workless households and low educational attainment among disadvantaged pupils. Both of these measures are presented in this and previous editions of this report.

But these two measures take a narrow view of the causes of poverty. The poverty rate almost doubles in London once housing costs are taken into account and the majority of Londoners in poverty live in a working family. So the causes of poverty are not only lacking work and qualifications, but also include lacking work that offers sufficient pay and hours, and lacking affordable housing. These aspects need to be reflected in how the government measures the causes of poverty.

However, while it is important to target and monitor the causes of poverty, it is still necessary to measure poverty itself. Income is an important part of this.