Income poverty
Key points
- London has the highest child, working-age and pensioner poverty rates of any region in England.
- Inner London has the highest poverty rates of any region for all age groups. While Outer London has the second highest child and working-age rates, the rate of pensioner poverty is about average.
- Child and working-age poverty rates across London are unchanged since the late 1990s. The pensioner poverty rate has come down substantially in London and elsewhere.
- Poverty trends in Inner and Outer London are moving in opposite directions: Child and working-age poverty have come down in Inner London since the late 1990s but risen in Outer London. So though higher in Inner London, poverty rates for children and working-age adults are getting worse in Outer London.
- As a result, a majority of people in poverty in London now live in Outer London. Ten years ago they were evenly split between Inner and Outer.
- The poverty rate for children living in working families is much higher in London, and in Inner London in particular, than elsewhere in England.
- Moreover, the number of children in London living in low income working families has risen since the late 1990s. Now almost half of children in low income households in London are in working families.
- Housing costs account for a lot of the difference in the poverty rates between London and the rest of England.
- Measuring poverty 'before housing costs' is particularly misleading in London. These indicators use the 'after housing costs' measure.
Find out more about Income poverty by visiting the indicators in this section, listed on the right.
How is poverty (low income) defined?
Since poverty is something that is inherently relative, a household is considered to be in low income ('income poverty' or 'poverty' for short) if its income is less than 60% of median UK household income for the year in question.
By being defined in relation to the median, this measure looks at the gap between the poorest and the middle, not the poorest and the richest. So while some inequality – the difference between the top and the bottom – is inevitable, poverty is not. There is no mathematical reason why any household should be below 60% of median, contemporary household income.
Throughout this site, poverty is defined and measured for the household as a whole rather than for the individuals in it. If a household is in poverty, it means that all the individuals living in that household are also in poverty.
In order to compare households, adjustments have to be made for household size. An individual living alone does not require the same income to enjoy a set standard of living as do a family of four. However, the requirements of a family of four are not four times that of a single person living alone. The household income is therefore 'equivalised' (adjusted) for size and composition using the same standard approach as that employed by the Department for Work and Pensions in its annual Households Below Average Income series.
Low income thresholds in 2006/07
| Figures for 2006/07, from Households Below Average Income series, Department for Work and Pensions | Low income threshold Before Deducting Housing Costs (BHC) | Low income threshold After Deducting Housing Costs (AHC) |
|---|---|---|
| Single adult | £151 | £112 |
| Couple without children | £226 | £193 |
| Lone parent, two children under 14 | £242 | £189 |
Relevant Indicators
Glossary
Inner London:
Camden, Hackney, Hammersmith & Fulham, Haringey, Islington, Kensington & Chelsea, Lambeth, Lewisham, Newham, Southwark, Tower Hamlets, Wandsworth, Westminster
Outer London:
Barking & Dagenham, Barnet, Bromley, Bexley, Brent, Croydon, Ealing, Enfield, Greenwich, Harrow, Havering, Hillingdon, Hounslow, Kingston upon Thames, Merton, Redbridge, Richmond upon Thames, Sutton, Waltham Forest