Living In London On Low Income: Gap Widens Between Rent And Wages

Rachel Holdsworth
By Rachel Holdsworth Last edited 42 months ago
Living In London On Low Income: Gap Widens Between Rent And Wages

Photo by Compound Eye from the Londonist Flickr pool

Every six months, we do a quick check on the cost of living in London. What began as a genuine question about whether it was possible to live in this city as a family on low pay without claiming benefits, has become a morbid examination of the widening gap between rents and what people actually have in their pockets.

And what a gap: in the six months since we last did this, rents in some of the cheaper parts of town have shot up by £100 a month. Minimum wage and London Living Wage (LLW) earners get around £40 a month more now than they did six months ago — and considering the LLW can take up to six months to reach pay packets, that lag will make the gap even bigger.

To recap: we've created a fictional family with two children, of convenient enough age and gender that they can share a bedroom and not need childcare (or that family members in the area can look after the kids; if we had to factor childcare costs into these calculations they'd just fall apart, which is a whole other discussion). We work out income for two and one adults working, on minimum and living wage, add in child benefit (because some benefits are just obvious), deduct the cheapest possible bills we can find using price comparison websites, travelcards (assuming jobs are in zone 1) and £80 a week for food. We don't attempt to work out things that can vary hugely, like clothes and shoes. (You can read a much longer explanation of the criteria in our original article.)

Income

Minimum wage: £6.50 an hour x 40 hours = £260 a week / £1,118 a month. After tax and with child benefit: £1,040.52
With two people earning plus child benefit: £2,046.99

London Living Wage: £9.15 an hour x 40 hours = £366 a week / £1,573.80 a month. After tax and with child benefit: £1,350.46
With two people earning plus child benefit: £2,666.87

Bills

Gas and electricity: £56.50 a month
Water: £34.05 a month
TV licence: £12.12 a month
Phone and broadband: £19 a month
Contents insurance: £4.19 a month
Council tax: dependent on area, roughly £100 a month (£75 a month for single parent household)
Monthly travelcard zone 1-3: £141.40 / Monthly travelcard 1-6: £219.70
Food: £350 a month (£270 for single parent household)

Money left on minimum wage
Two adults living in zone 1-3 have £1,188.33 left
One adult working, living in zone 1-3 has £428.26 left
Two adults living in zone 1-6 have £1,031.73 left
One adult working, living in zone 1-6 has £349.96 left

Money left on living wage
Two adults living in zone 1-3 have £1,808.21 left
One adult working, living in zone 1-3 has £738.20 left
Two adults living in zone 1-6 have £1,651.61 left
One adult working, living in zone 1-6 has £659.90 left

Where can they afford to live?
Bloody hell. From being one of the cheapest zone 3 places to live last time we checked, rents in Catford have leapt from just under £1k a month to about £1,100pcm. Er, congratulations Catford, you're clearly now gentrifying. This does now mean that we're scratching our heads to think of anywhere you can rent a two-bed place in inner London for less than a grand a month (we don't count clear outliers). Bexley and Feltham have also added around £100pcm in six months. All are outdone by Uxbridge, now about £150 a month more expensive than it was in May. How depressing.

Zone 3
Neasden from £1,200pcm
Tottenham from £1,100pcm
Catford from £1,100pcm
Forest Gate from £1,050pcm
Streatham from £1,050pcm

Zone 6
Chadwell Heath from £900pcm
Bexley from £850pcm
Uxbridge from £1,100pcm
Caterham from £1,000pcm
Feltham from £1,000pcm
Enfield from £1,000pcm

Outside London
Milton Keynes from £750pcm
Monthly travel with travelcard £544.60

Sevenoaks from £850pcm
Monthly travel with travelcard £369.50

Chelmsford from £700pcm
Monthly travel with travelcard £440.90

Guildford from £1,000pcm
Monthly travel with travelcard £394

Last Updated 07 November 2014

Mrsaverage

Great article thank you. In April my rent (I live in sheltered housing) went up by £46 per month, my pension went up by £1 per month. This is so unfair as my housing association is fully aware of my income. I did complain so they lowered it to an increase of £23 per month!!

abbey303

Hackney is the best place to live. Shame about the ruthless money making rip off landlords. 😈

ciaobella

Hello, I've told about your article to Rue 89 here in France, as they do something a bit similar since many years : showing how much a family, a couple, an individual earns and spend, you learn a lot through this.

http://rue89.nouvelobs.com/por...