Low-income households in London are facing an extra burden of more than £600 a year just to access standard goods and services, research shows.
Study by Fair by Design, externalFunded by the Trust for London, affected households in Peckham pay an average of £493 more a year than wealthier households for the same items.
This “poverty premium” rises to more than £600 in the worst-hit areas of the capital, driven by factors such as greater reliance on high-interest credit and increased costs for non-direct debit billing.
A government spokesperson said ministers are “committed to overcoming poverty after years of increasing hardship” and that their policies are working.
The report’s authors found that the biggest driver of the so-called poverty premium was food shopping, with 39% of households forced to rely on local convenience stores rather than larger supermarkets with more competitive pricing.
The research also notes that despite recent regulatory changes, the energy and insurance systems continue to penalize the poorest people across the UK.
Prepayment meter users pay £129 more a year than competing fixed direct debit tariffs, while drivers living in deprived postcodes pay an average of £153 extra on their motor insurance.
Manny Hothi, chief executive of the Trust for London, called on regulators to take into account the impact of their markets on people living in poverty.
He said it is important to “end the unfairness of people paying more because they pay monthly or don’t sign up for direct debit.”
At a free café run by the charity Pecan in Peckham, visitor Josiah Lahaie said he goes to the supermarket “and there are things I want but I can’t buy them.”
