Walking around Tower Hamlets, the huge economic divide that polarises this east London borough is stark.
Canary Wharf’s glistening skyscrapers and iconic capital landmarks like the Tower of London nestle alongside the shadow of dilapidated tower blocks.
More than half the children here live below the poverty line and the area has seen claims for benefits balloon among its older working-age population.
More than half of the 50- to 64-year-olds in Tower Hamlets claim universal credit (UC), the highest in England and Wales, research by the TaxPayers’ Alliance (TPA) shows. It also has the joint-highest share of people in their 40s claiming universal credit (43.5 per cent), alongside Birmingham.
People who are on a low income, out of work or unable to work can claim the benefit, which is designed to help with living costs.
When presented with the data, some residents were shocked, while others weren’t surprised, saying that the area has “fallen by the wayside” and that there is a lack of opportunities.
Tower Hamlets Council says the reasons the area has the highest number of benefit claimants aged 50 to 64 are “complex and cannot be viewed in isolation”, with the borough facing “significant levels of poverty, high housing costs and wider economic pressures”.
The wider benefits issue
The i Paper previously visited Blackpool and Thanet – areas which have the highest and second-highest numbers of UC claimants aged between 20 to 29 – but Tower Hamlets’ issues lie with the older generation.
Statistics from the TPA show that 50.4 per cent of those aged 50 to 59, and 51 per cent of those aged 60 to 64, claim UC in the local authority.
The research also found that 43.5 per cent of 40- to 49 year-olds in Tower Hamlets are on UC, the joint highest alongside Birmingham.
Benefit reform is set to be a key issue for Chancellor John Healey in the autumn Budget and the coming months, with leading economists warning he faces having to raise taxes or slash the welfare bill by up to £35bn.
Amid growing pressure on Healey to cut spending, the welfare system is straining under a record number of benefit claimants – 24.5 million in March 2026, according to the latest Government figures.
Of that total, almost 8.3 million were claiming UC.
‘Everything has fallen by the wayside’
In the middle of a quiet market, Erica, 74, told The i Paper of the difficulties faced by those living in Tower Hamlets.
“Everything has fallen by the wayside. I just feel that the council are not willing to come forward and help as much as they should and that’s why a lot of people want benefits to survive,” she said.
“The cost of living is just so high here, the rents are going up every year and salaries are not high enough for people to live on.
“I know people that have two or three jobs, so obviously they are going to take universal credit if they can get it.”
The pensioner added: “That’s something that the Government should look at in the October Budget.”
One woman told The i Paper that she claimed UC as she was out of work due to a medical condition.
“I know that a lot of people around here have lost their jobs due to things like automation,” the 49-year-old said.
A spokesperson for the Department for Work and Pensions (DWP) said three-quarters of the increase in universal credit cases since July 2024 have been driven by people moving from legacy benefits that UC replaced, a transition started by the previous government.
The DWP added that many UC recipients are already in employment, but reforms from two reviews into benefits and joblessness commissioned by the Government, the Timms and Milburn Reviews due this autumn, will “put work and opportunity at the heart of the system”.
The Government is also investing £3.5bn in employment support for disabled people and those with long-term conditions, the department said.
Matthew Illing, 30, was another who wasn’t surprised by the borough’s UC figures. “It’s certainly not a wealthy area,” the data analyst said.
“When I’m out during the day, I often see a lot of people that you would expect to be at work, more so than when I have lived in other areas of London.”
Ethnic minority communities ‘face disadvantage in job market’, says council
Ahmed Elnaggar, who works in the energy industry, said he was shocked by the statistics.
The 32-year-old said a contributing factor could be that large parts of the population in Tower Hamlets are from ethnic minority backgrounds, “which traditionally have disadvantaged socio-economic situations.”
DWP data from May 2026 found that 62.2 per cent of UC claimants in Tower Hamlets were Asian/Asian British, 20 per cent were white, 9.2 per cent were black and 3.5 per cent were mixed race.
Figures from a 2021 census carried out by the Office for National Statistics found the population of Tower Hamlets is 44.5 per cent Asian/Asian British, 39.3 per cent white, 7.4 per cent black and 3.6 per cent mixed race.
A Tower Hamlets Council spokesperson said the area “has a diverse population, and national evidence shows that some ethnic minority communities experience higher levels of poverty and disadvantage in the job market throughout their working lives”.
Elnaggar added that there is a lack of employment opportunities in the area.
“I find that it is very residential and there aren’t many small businesses compared to other areas of London I have lived in, which I guess means less job opportunities,” he said.
Jim Ford, one of the directors of community-based, anti-poverty charity SocietyLinks, said that older people struggle with job opportunities.
“A lot of younger people will move out of Tower Hamlets to raise families, but older people don’t necessarily want to move out of the area, and they suffer with the lack of opportunities,” he said.
“What also doesn’t help is that the area is probably overpopulated, which just increases the competition for jobs,” the 74-year-old added.
What is being done to help the situation?
Many of the residents that spoke to The i Paper called on both the council and the Government to implement policies that would help those struggling with the cost of living and voiced support for Andy Burnham’s back-to-work scheme.
Responding to questions about the high percentage of 50- to 64-year-olds on UC, the council said: “What is encouraging is that many people in this age group want to work, remain in work or increase their earnings, but often need tailored support.”
Through the support it provides, the council said that it has helped 350 residents get back into work in the last year.
The spokesperson added: “There is no single solution, but by combining employment support, skills development and strong partnerships with local employers, we are helping residents access sustainable, rewarding work and greater financial security.”