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
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.
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.