Summary

We have recorded the population of usual residents in a selected postcode at the the time of the 2021 census (recast from census output area), categorised according to the resident’s socioeconomic classification based on their self-reported occupation and job characteristics.

Definition

Socio-economic classification (SEC) is based on the population’s self-reported occupation and job characteristics in the Office of National Statistics’ 2021 Census. Economic activity is defined as whether a person aged 16 or over was actively participating in the labor market during the census reference period.

A person is considered:

Economically active if they were employed, self-employed, actively looking for work, or waiting to start a job they had already secured.

Economically inactive if they were not working or seeking work, such as retirees, students, caregivers, or those with long-term illnesses or disabilities.

Why the metric matters from a commercial inhabitant’s perspective

Commercial inhabitants can gain distinct competitive advantage by appreciating the socio-economic groupings of the local geographies in which they operate. For example, knowledge of local socio-economic conditions will help determine how well the businesses’ services will be well-received in the area, as information about the disposable income levels of a neighbourhood tend not to dictate this as much as socio-economic indicators do.

Why the metric matters from a residential inhabitant’s perspective

Residents will be interested to know that the higher the proportion of persons in your neighbourhood who are higher up the socio-economic scale the better the health and education outcomes will be for you and your children. The more precarious the conditions of the head of the household the more precarious the health and education outcomes tend to be for Londoners. However, the highly mixed nature of London’s housing means that areas with high proportions of people in non-routine labour can be in amongst pockets of wealth and these areas can have better education outcomes.

General commentary

Today, demographers consider that understanding a population’s employment relations and conditions of occupation are the best way to classifying the structure of socio-economic positions in modern societies and helping to explain variations in social behaviour and other social phenomena.

London is home to some of the richest and poorest communities in the UK. The wealthiest 10 per cent of London households own more than 50 per cent of the capital’s total household wealth (£775 billion), and the bottom 50 per cent own less than 10 per cent of London’s total wealth (£80 billion). If we look at figures for gross income per week for these groups, London is the most socio-economically polarised region in the country. Nationally, 10 per cent of households have gross incomes (before tax) below £215 per week, while the figure is only slightly higher in London at £231. At the other end of the scale, the top 10 per cent of households in the UK have income above £1,454 per week, compared to the higher figure of £1,945 per week in London.

Londoners also pay more for housing in real terms and a greater proportion of their wage towards these costs so almost half of London households have less disposable income after paying the essential costs for housing than equivalent households in the rest of the UK. This can mean that Londoners who have below average disposable income are forced into worse housing which is generally found in areas where the local environment, local amenities, schools, and transport they have access to are also poorer, thus making social mobility even more of a distant dream.

Poverty levels among London’s population after taking account of housing are much higher in London than the UK as a whole. One in three of all inner London residents are in poverty by this measure and nearly one in four outer London residents, which is also higher than for any other UK region.

There is also a mixed picture for London’s children. Around 300,000 children in inner London are living in poverty (after housing costs), with a further 400,000 in outer London. The child poverty rate in inner London remains particularly high, nearly one in every two, and although the outer London child poverty rate is lower, at one in three children it is still higher than for any other UK region.

Many areas within the following boroughs fall within the bottom five per cent of the most deprived in the country: Barking & Dagenham, Brent, Croydon, Ealing, Enfield, Hackney, Haringey, Islington, Kensington & Chelsea, Croydon, Lambeth, Lewisham, Newham, Tower Hamlets, Waltham Forest and Westminster. The City of London and Richmond are the only local authority areas within London with no areas in the most deprived 20 per cent of England.

Across London, there is also considerable disparity in income levels across local areas. Although the areas that are richer on average, are generally in the west of London, the pattern is dispersed. Several boroughs, such as Wandsworth, Kensington and Chelsea, Lambeth and Southwark, each include small areas with average net income of over £1,000 per household per week, as well as areas where the average net income is less than £500 per household per week. In contrast, there are few areas in east London with high average incomes. No areas in Barking & Dagenham have an average net equivalised income above £600, with only five of the 22 areas in the borough exceeding average incomes of £525 per week.

Trivia

A study by a professor at the London School of Economics found that people in high-salary jobs, whose parents were also in high-salary jobs, get paid more across several types of profession from doctor to journalists. Explanations offered included that the people whose parents were better off and possibly higher up in society received more support to gain better qualifications but also that they may have better connections which helped them achieve these better paid positions.

History

Up to the late seventeenth century and early eighteenth century London was a city with a very small middle class, which is evident from records of a small aristocracy and nobility living alongside a very high proportion of manual labourers and domestic servants. Skilled labourers such as coach-makers were top of the working-class pyramid. Geographically, London was less polarised than it is now as the East-West wealth divide was not yet entrenched.

The numbers of medical and legal professionals, grew rapidly from the last quarter of the seventeenth century to the mid-eighteenth century. Lots more hospitals and institutions were established in London in the eighteenth century and it was Britain’s largest manufacturing centre, its largest port, and the centre of governance, the professions, trade, and finance. Approximately one third of the population was involved in manufacturing. Retail occupations still made up a large proportion of those found in London. In this period one in nine Londoners kept a shop. Half of all employed women worked in domestic service in this period (compared to perhaps five percent of men). Beyond this, women were largely restricted to needlework and laundry, and the large numbers of unskilled and poorly paid employments associated with street selling and casual labour.

In the late-eighteenth century London was more geographically integrated in terms of social standing on For and occupation. Thanks to the Industrial Revolution, workers’ ability to create wealth was no longer limited to the number of man hours they put in, as mechanisation enabled people to make a fortune from manufacturing and trading goods. These new professional, technical and clerical roles required required a high degree of education and training. The proportion of people who could be considered middle class grew rapidly in this time. By the early nineteenth century the city had become increasingly subdivided between rich and poor and the divide between east and west was firmly entrenched and with that the sorts of occupations you found in each area. The middle-class had grown substantially and aspired to the manners and attitude of the upper classes as is evident from the number of publications on the topic from this era but the precariat were criminalised and forgotten in nineteenth century London.

This began to change more following the first and second world wars of the twentieth century, which made the most dramatic socio-economic changes for women ever seen and changed the nature of labour for many working Londoners due to technological advances. House building campaigns, the NHS and the growth of the welfare state also ensured better life outcomes for a larger proportion of Londoners. Civil rights movements also ensured that fewer groups were socially excluded as they had been in the nineteenth century.

The push to educate Londoners to a better level has also continued with growing success overall. n the early 1900s working class children often worked half the day and only went to school for the remaining half of the day to gain a foundational education. By the 1960s all children had full-time education and their nutrition in and out of school was considered more important.

In the 1960s, the number of students going to university doubled. The number of Londoners going to University peaked following government initiatives in the 1990s and whilst it is clear that employment outcomes are markedly better for those who studied certain degrees at certain universities, one’s life outcomes in general the benefits to society are clear, as a clear positive correlation is apparent between higher education and lower crime levels.