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Poverty 'before' and 'after' housing costs

Key points

  • In the three years to 2013/14, the poverty rate in London before housing costs (BHC) was 15%, while poverty after housing costs (AHC) was 27%.
  • London's BHC poverty rate is about the same as the rest of England average but 7 percentage points higher on the AHC measure.
  • Overall poverty using either the BHC or AHC measure has not changed significantly in London or the rest of England since the mid-1990s.

Poverty rates ‘before’ and ‘after’ housing costs

What does this graph show?

The graph shows how poverty has changed in London compared with the rest of England over time. It also shows how this differs when low income is measured before and after housing costs.

In the three years to 2013/14, poverty before housing costs (BHC) was 15%, while poverty after housing costs (AHC) was 27%. Both of these figures are one percentage point lower than the previous year.

In comparison with the rest of England, London is about average in terms of the BHC measure but remains 7 percentage points higher on the AHC measure. The gap between BHC and AHC poverty is considerable across England, but even more so in London. As London has considerably higher housing costs, the BHC measure is a misleading reflection of actual disposable income. We therefore use the AHC measure throughout this website as it offers a more accurate picture of how poverty varies across the capital and compared with the rest of England.

Over the past three years, the median income has remained relatively flat both before and after housing. So the slight fall in relative poverty on both measures suggests incomes at the bottom have risen slightly. Overall though, BHC and AHC poverty do not seem to have changed significantly in London or the rest of England since the mid-1990s. There was a slight dip in the early 2000s, then a rise in the late 2000s, followed by a levelling off again now.

Data used

Households Below Average Income, DWP

Indicator last updated: 15 October 2015