Measuring the Disability Pay Gap in London

This report, commissioned by Peabody, provides new insights into the lives of individuals living in London – in particular, with respect to their living standards and financial situation. It draws on data from a wide range of official sources to track and analyse developments in incomes, savings and living costs.

This is the third of a series of Peabody Index reports. In this edition, we focused on the labour market experiences of disabled Londoners

The key findings of the report are:

• Just over a fifth (21%) of adults in London have a disability which has a substantial and long-term adverse impact on the ability of individuals to carry out day-to-day tasks. Among those with of working age, 15% of Londoners have such a disability.
• In London and the UK as a whole, about two fifths of disabled individuals are economically inactive. When looking at social housing tenants – who are more likely to have lower household incomes – over three in five with a disability are economically inactive. In London, disabled people are two and a half times more likely to be economically inactive than those without a disability.
• Among the economically active, those with a disability are twice as likely to be unemployed (out of working and seeking a job). In 2018, the unemployment rate for disabled Londoners stood at 9.3%, compared to 3.7% for those without a disability. Among social housing tenants in the capital, over a fifth (20.7%) of disabled and economically active tenants were unemployed. This compares with 8.7% of non-disabled social housing tenants.
• Once in work, those with disabilities face a substantial pay gap compared to those without a disability. Across the UK as whole in 2018, median gross weekly pay among those with a disability was 21% lower than those without a disability. In London, this pay gap was slightly higher at 23%, and among social housing tenants in London the pay gap was also 23%.
• Across the UK as a whole, median usual hours worked are 3% lower among disabled individuals compared to those without a disability. However, this gap in hours worked is notably higher in London at 8%. Among social housing tenants in London disabled individuals work 22% fewer hours than those without a disability. Further, those with a disability are more likely to report wanting to work more hours than they actually do.
• Concerningly, over the past 10 years, the disability pay gap has widened across the UK as a whole, as well as in London and among social housing tenants in the capital. 
• Comparing the disability pay gap with the gender pay gap, in terms of median weekly pay, shows that the gender pay gap is higher across the UK and London. However, among social housing tenants in the capital, which we can take as a proxy for low earners, the disability pay gap is slightly higher.

While London has a lower gender pay gap (in percentage terms) compared with the rest of the country, it has a higher disability pay gap.

• Those with a disability in London are more likely to be working in the relatively low wage retail sector. Further, those with a disability are much less likely to be employed in managerial and professional roles, and more likely to be employed in lower paid elementary occupations.

• Relatives of those with disabilities, who often have to provide care, are also impacted in terms of their labour market outcomes. About three in ten Londoners that are unemployed and not looking for work are in this situation mainly because they need to look after family. The main reason for being economically inactive to look after family is the need to care for children, though for 18% of social housing tenants in London caring for a dependent adult was the main reason cited.