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More than half of the 2.3 million Londoners living in poverty are members of households in which someone is earning money, research has found.

The overall poverty rate in London has fallen slightly from 29% to 27% over the past six years, because of rising employment levels, but having a job is not enough to protect a huge number of residents from financial hardship.

According to a study by the Trust for London, 58% of Londoners who are in poverty are living in a working family, the highest this figure has ever been. The proportion is up from 44% a decade ago and 28% two decades ago.

Mubin Haq, director of policy at the Trust for London, which works to tackle poverty and inequality in the capital, said: “Despite record levels of Londoners in work, poverty rates have only nudged down slightly over the last few years. Over 2 million Londoners are struggling to make ends meet. That’s more than the entire populations of Manchester, Liverpool, Bristol and Newcastle combined. The reality remains, that for many work does not pay enough, or offer the security that people need.”

The report also shows that wealth inequality is more extreme than income inequality in London, with the top 10% of households owning just over half the city’s wealth, and the bottom 50% of households owning 5%. The amount of wealth held by the bottom tenth of households decreased by a third in London between 2010–12 and 2012–14, whereas across Great Britain it fell by just 2%.

The high cost of housing in the capital largely explains the higher rate of poverty in London (27% of Londoners, compared with 21% across England). The rising cost of rents and the lack of availability of social housing mean that more people in poverty now live in the private rental sector than in any other kind of housing tenure, nearly 1 million; the number of children living in poverty in this sector has tripled over the past 10 years.

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