That is the headline finding of a new report from the Centre for Research in Social Policy (CRSP) at Loughborough University.
For the first time since this research began, members of the public in Inner and Outer London said that social housing is too difficult to access, unless someone has exceptional circumstances.
As a result, the study now assumes that all households, including pensioners, must rent privately.
In previous years, pensioner households were assumed to live in social housing. In 2025, they are assumed to rent in the private sector, bringing higher costs and less security.
For some pensioner couples, private rent can take up nearly half of the weekly budget needed for a minimum acceptable standard of living.
Dr Chloe Blackwell, who led the study, said: “For the first time since our research in London began, a minimum living standard in the capital now includes the cost of private rents for all households.
“We know that private rents are much higher than social rents and this really pushes up the income households need for reaching a minimum socially acceptable standard of living - to live with dignity in London in 2026. We also know that renting privately can be less secure and that there are justifiable concerns about quality and suitability.
“This significant change coming out of our research in London this year points to some very real challenges in the housing market and reveals the consequences of the depletion of social housing stock.
“People in London feel strongly that households at all stages of life should be able to expect a reasonable degree of choice, including about where they live. Instead, many find themselves trapped, paying rents which take up a substantial proportion of their income, meaning that what is left does not give them enough to live with dignity in London.”
The report, A Minimum Income Standard for London 2025, sets out what people think is needed to live with dignity in the capital.
The budgets are based on detailed discussions with Londoners about everyday needs, not luxury, but a basic, socially acceptable standard.
The research finds that around 3.98 million people in London do not have enough income to reach this minimum level.
That includes more than half of all children in the capital, around 1.12 million. Over a third of pensioners are also below the minimum standard.
The minimum budget includes the cost of:
- Rent and council tax
- Childcare
- Transport across London
- Food, clothing and household bills
- Basic social activities and a modest UK holiday
While some everyday costs are similar to the rest of the UK, housing in London is far more expensive. Public transport and some services also cost more.
The report shows that many households relying on benefits, or earning around the National Living Wage, fall short of what is needed to meet this basic standard.
It concludes that the gap between incomes and the real cost of living in London remains large.
Co-author Professor Matt Padley said: “Our latest research in London shows that it remains a city where the decent, dignified standard of living we all deserve is out of reach for far, far too many people.
“Nearly 4 million people in London don’t have enough for this standard of living. Over half of all the children in the capital - that’s a million children - are growing up in households without what they need to cover the essentials, but also without what they need to take part in and feel part of the city they live in.
“And the biggest challenges facing lots of households are the same ones we highlighted back in 2015. Accessing affordable, appropriate, secure housing is a challenge for so many households, with incomes really squeezed by high housing costs.
“Wages have not kept up with costs, meaning that even full-time work, paid at the National Living Wage, falls well short of providing what households need. For households out of work, the picture is even more grim, with a substantial gap between what they need and what safety-net benefits provide.
“Things need to change and change quickly, particularly when it comes to housing. The past decade has seen a lot of commitments to provide appropriate, affordable homes, but it remains the case that not enough is being done to ensure that London remains a city for all.”