A third of Londoners unable to afford a decent standard of living, research from Loughborough University reveals
New research from Loughborough University shows 1 in 3 Londoners are struggling to afford basic needs and achieve a decent standard of living.
The research, conducted by the Centre for Research in Social Policy (CRSP), is the first to look in detail at the minimum additional costs of living in the capital. The data, funded by independent charity Trust for London, shows that it costs between 20% and up to 50% more for various types of household to reach a minimum decent standard of living in London than elsewhere in the country. This is because of additional costs, particularly housing, transport and childcare.
Compared to the rest of the UK, the research shows:
- A minimum budget for a single working-age adult is 47% higher in inner London and 35% higher in outer London. This is largely driven by high housing costs, which in inner London make up almost half the living costs for a single person
- A minimum budget for a couple with two children is 23% more in inner London and 22% more in outer London. This is influenced by the high cost of childcare
- A minimum budget for a pensioner couple is 32% more in inner London and 19% in outer London. This is driven by rent and the additional cost of social activities.
While one in three Londoners overall fall below the Minimum Income Standard (MIS), this varies greatly across groups:
- More than four in 10 people (43%) in families with children are below the standard
- A quarter of working-age adults without children (26%) are below MIS
- Nearly one in five pensioners (18%) do not meet the standard.
The figures for MIS come from detailed discussions among people who live in the capital and feedback on what they themselves say is needed to lead a decent life. The minimum includes food, shelter and clothing and items such as being able to buy a child’s birthday present or a cheap meal out up to twice a month to maintain friendships and work relationships. By far the biggest costs come from housing, transport and childcare. Since 2008, all these costs have risen sharply in London: social rents by more than a third, childcare costs by nearly two-thirds and public transport fares by a quarter. Over the same period, average earnings have risen by only 10%.
As well as the higher price of housing, childcare and public transport in London, costs are also influenced by how Londoners live. For example, they do not need cars but they do need tubes (not just buses) which are more expensive than public transport elsewhere. Leisure is also structured differently to outside of London, and can cost more partly because Londoners tend to have less indoor space and therefore do more things outside the home.
For a single person to reach the Minimum Income Standard in outer London, they would need to earn at least £24,500 a year if they lived in a rented (lowest quartile rent) studio flat (the type of accommodation that Londoner’s thought qualified as a minimum – in the UK MIS, this minimum is a one-bedroom flat) and at least £21,100 if they were sharing. The equivalent for inner London is £27,100 living in a studio and £22,300 in shared accommodation.
Matt Padley, Senior Research Associate at Loughborough University’s CRSP, said: “This is the first piece of research that has asked Londoners to look in detail at what is needed to lead a decent life.
“The findings can help policymakers to explore in more depth the impact of particular costs in London. For example, people may say a rent is unaffordable to someone on a particular income but what does that mean? You need to know how much people require, after paying their rent, to afford the other basics of life. This research provides those figures.”
Mubin Haq, Director of Policy and Grants at Trust for London, said: “For some it costs almost 50% more to reach a decent standard of living in the capital compared to the rest of the country. The very high costs of housing, transport and childcare mean 1 in 3 Londoners are struggling to live a decent life, especially families with children.
“This is not about just food, clothing and having a roof over your head. It’s about the difference between people being able to participate in society or not. It raises important questions about whether London is for everyone or does it become a city for the wealthiest?
“To help more Londoners reach the minimum, we need a two-pronged approach which tackles low incomes, particularly low wages, coupled with policies to bring down the costs of housing, transport and childcare. Action is needed by employers to pay at least the Living Wage and by Government, particularly in relation to affordable housing.”
The full report is available to view here.
Notes for editors
Press release reference number: PR 15/90
Loughborough is one of the country’s leading universities, with an international reputation for research that matters, excellence in teaching, strong links with industry, and unrivalled achievement in sport and its underpinning academic disciplines.
It has been awarded five stars in the independent QS Stars university rating scheme, putting it among the best universities in the world, and was named University of the Year in the What Uni Student Choice Awards 2015.Loughborough is consistently ranked in the top twenty of UK universities in the Times Higher Education’s ‘table of tables’ and is in the top 10 in England for research intensity. It was 2nd in the 2015 THE Student Experience Survey and was named Sports University of the Year 2013-14 by The Times and Sunday Times. In recognition of its contribution to the sector, Loughborough has been awarded seven Queen's Anniversary Prizes.
In 2015 the University will open an additional academic campus in London’s new innovation quarter. Loughborough University London, based on the Queen Elizabeth Olympic Park, will offer postgraduate and executive-level education, as well as research and enterprise opportunities.
Trust for London is the largest independent charitable foundation funding work which tackles poverty and inequality in the capital. Each year, it provides around £7 million in grants and at any one point is supporting some 400 voluntary and community organisations.