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London in the Red: consumer debt trends in London

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London debt statistics: 1 in 5 of our clients came from London in 2015

Our latest report, London in the Red, highlights the issues and key statistics of problem debt in London. By analysing client data we’re able to gain an insight into trends and financial difficulties faced by those living in the capital.

We helped 550,000 people with their debt problems in 2015, and almost 100,000 of them came from London.

By analysing data from 15,404 clients who received first time advice through our debt Helpline in 2015 and had a known London borough postcode we were able to provide a picture of problem debt in London. In our latest report we’ve compared this with the UK as a whole and looked at differences across London’s 32 boroughs.

Our key findings on personal debt in London in 2015

Nearly 1 in 5 clients we helped lived in London

last year 1 in 5 clients we dealt we lived in london

We estimate nearly half a million Londoners are struggling to pay their essential bills and credit commitments and that this costs the London economy at least £1.4billion each year.

This is because of the effect debt worries have on people's health, ability to do their job and to stay in employment, as well as the link between problem debt and other harmful events such as losing a home or relationship breakdown.

More than 1 in 3 of our clients in London were in rent arrears. The amount of rent they owed was half as much again as the UK average

This is likely to reflect London’s higher rents and the greater proportion of Londoners’ income that has to be spent on housing costs. People who lived in the poorer London boroughs, where average incomes are lower, struggled more with their rented housing costs than those who lived in the richer parts of the capital.

Well over a third of clients in London had mortgage arrears, over £1,000 more on average than for the UK as a whole.

London clients spend a higher proportion of their income on priority expenses

The amounts owed by London clients on essential household bills were higher than the UK generally. Londoners’ arrears on essential bills tended to make up a greater proportion of the problem debt of those living in more deprived areas, where average incomes were lower.

This shows that the cost of living in London particularly hits those on low pay.

Mike, CEO stepchange quote: London streets more likely to be paved with debt than gold"

Those who lived in richer London boroughs were more likely to have fallen into debt as a result of a divorce or separation

Divorce or separation was the major cause of debt for 7.1% of London female clients compared with only 3.5% of male clients. However, Londoners fell into debt for a range of other reasons including job loss, a drop in income, illness or disability.

Clients from poorer London boroughs tended to be struggling to pay essential bills, particularly their rent. In contrast, in richer boroughs our clients’ financial difficulties tended to be linked with higher levels of borrowing, mostly through credit card and overdraft use.

Overall our data shows that problem debt can affect anyone living in London, no matter where they live or how much they earn.

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Our research and reports

As the UK's leading debt charity, we want to make millions more people aware of the help that StepChange Debt Charity offers. Take a look at our research on household and consumer debt for leading insights on problem debt across the UK.

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

*This is the average rating of our service based on the StepChange reviews on Feefo by DMP and DRO clients three months into their solution.

© StepChange Debt Charity 2016