Nearly a third of Londoners are living in poverty, study reveals

Almost a third of Londoners are living in poverty with the majority in working families, a new study has revealed.

The report, compiled by the charity Trust for London and the New Policy Institute think tank, points to low pay and the city's sky-high housing costs as key reasons.

Researchers found that 27 per cent of Londoners live in poverty compared to 20 per cent in the rest of England. The report also reveals that more than a million people in the capital who are defined as living in poverty are in households in which at least one person is employed – an increase of 70 per cent in a decade.

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"A record number of Londoners are in work, yet this has had little impact on the numbers living in poverty in the capital," says Mubin Haq, Director of Policy & Grants at Trust for London. "On too many occasions work doesn't pay enough, leaving people living in precarious situations."

The cost of housing continues to be a key driver of poverty in the capital with many people continuing to move from inner to outer London, as soaring rental costs push them out of the city centre.

"When people talk about 'generation rent' they normally think of young working adults unable to save a deposit," says Hannah Aldridge of the New Policy Institute, who is one of the report's authors.

"But the 260,000 children growing up in private rented poverty are at the sharp end of London's housing crisis – living in expensive, often low quality homes, without long-term security."

The government's "affordable" starter homes priced at £450,000 will not solve this problem, Aldridge argues. "London needs investment in more housing suitable for a range of families and incomes, and it needs greater powers to ensure private accommodation is of a good standard," she says.

Researchers warned that the government's controversial planned cuts to in-work tax credits due to be implemented next year are likely to leave 640,000 children in London worse off.

Labour's London mayoral candidate Sadiq Khan told The Guardian that the report showed that a "perfect storm" of the housing crisis, low pay and tax credit cuts made the government seem "determined to punish working Londoners".