A Minimum Income Standard for London 2022

Our latest research looking at what is needed for a decent living standard in London focuses on working-age adults without children, and pensioners. Groups of working-age adults and pensioners in Inner and Outer London discussed and agreed what these households need in order to have a minimum socially acceptable standard of living in 2022. The research calculated the difference in a minimum household budget between the capital and elsewhere in the UK, and looked at the implications of this difference for the adequacy of social security and wages. Finally, the findings of the research were used to look at the number of households without the income needed to meet this minimum standard in the capital and how this has changed over time.

The research found that:

  • Around 4 in every 10 people living in London (39%) have an income below what is needed for a minimum standard of living. This is above the 28% below this level in the UK as a whole in 2019-20.
  • 3.49 million Londoners are living in households with inadequate incomes. Just under 1 million children in the capital are growing up in households below the minimum income standard (MIS).
  • In most areas of life, minimum needs and the costs of meeting these are the same for working-age households without children and pensioner households in London as for similar households living in other urban areas of the UK.
  • The rising cost of essentials, such as food and home energy, has had a substantial impact on the amount needed for a minimum standard of living both in urban UK outside London and within the capital. Changes in what working-age adults without children and pensioners specified as required to reach this standard following the relaxation of Covid 19 restrictions, also had an impact on the cost of a minimum budget. People emphasised the importance of being able to re-engage with activities that had been impossible since early 2020, resulting in some substantial changes, particularly in relation to these activities outside the home for social participation, such as eating out.
  • There are key differences in how minimum needs are met in London compared to urban UK outside London, and the cost of these. For example, housing needs are largely the same in London, but the cost of rent – particularly for working-age adults without children – is substantially higher in the capital.
  • The additional costs of a minimum budget in London mean that a decent standard of living in the capital costs between 12% and 66% more. The biggest difference is for single working-age adults, living alone in Inner London where the cost of housing in the private rental sector are so much higher than other urban areas in the UK.
  • Safety-net benefits for people living in London continue to fall well short of meeting minimum needs. With the cost of living payments from government in 2022, support for out of work single working-age adults living on their own covers just 6% of minimum needs (after rent and council tax have been paid). The adequacy of support provided by safety-net benefits has reduced substantially over time – falling from 35% in Inner London in 2014.
  • 48% of children living in London are in households with incomes below what they need for a decent living standard, compared to 40% in the UK in the same year. Nearly three quarters (73%) of children in lone parent households are living below MIS.
  • Just more than a third of pensioners living in London (35%) have incomes below MIS, compared to 17% in the UK.
  • Three-quarters of individuals in the capital with incomes below MIS (74%) are living in rented accommodation.

Lead author of the report Matt Padley said: ‘Our latest research, rooted in what the public think, sets out what is needed to live with dignity in London today. This is not about an extravagant lifestyle, but about doing the sorts of things that many of us take for granted. It’s clear that meeting this decent standard of living is just not possible for lots of people living in the capital and this means having to make difficult choices about what to prioritise.

No one should have to worry about where their next meal is coming from, or whether they can keep a roof above their head. All people should be able to feel secure where they live, connected to those around them, able to live with dignity. We desperately need a shared vision of what London could be – for everyone – and a clear plan of how to achieve this’