Why London is the capital of debt
The streets of London are paved with debt, not gold.
According to popular opinion, London is all that’s venal about modern life; a rich fat cat of a city, dining at the top table while the rest of the country suffers from a recession the capital induced through its own profligacy.
But this hides a larger truth: London is actually the most over-indebted region of the country.
Think about the residents of west London borough Kensington and Chelsea and what comes to mind? It’s unlikely to be an area with the highest debt repayment burden in the capital. Or how about the borough of Hammersmith and Fulham? No-one would think of it as one of London’s rent arrears hotspots.
Research on London debt
Recently we commissioned research that identified London as the most over-indebted region in Great Britain. We have released a London debt infographic to accompany the publication of it.
The research found that this pain is not evenly spread, with those living in some boroughs more in the red than others. The city contains – as it always has – a vast collection of people, from those considered by some as obscenely wealthy, to those suffering from the highest rates of poverty seen countrywide.
The research highlighted the areas that are traditionally seen as the poor neighbours of the swanky boroughs of west London – it might come as little surprise that Tower Hamlets, Haringey, Brent and Barnet are London’s other rent arrears hotspots.
Debt south of the river
Looking south of the river – another knowing phrase for “poor relations” – we find Sutton and Croydon, the areas in most need of debt help. 40 in every 10,000 residents of these two boroughs contacted us for debt help in 2011.
Conversely, less than five miles north, straddling the river, lies the borough of Richmond-upon-Thames. That part of west London had the lowest demand for debt help in 2011 - 40 times fewer people living there contacted CCCS than in Sutton and Croydon.
Also south of the Thames, the highest proportion of payday loan borrowing among CCCS clients came from residents of Lewisham, Bromley and Lambeth.
Debt help for London
This isn’t too much of a surprise to regular readers. Last year we wrote about the debt hotspots of Britain. Rather than inner-city areas, the highest average personal debt occurs in those places regarded as the leafy suburbs of the London commuter belt - Slough, Watford, Sutton, Kingston upon Thames and Guildford.
At the time we cautioned anyone in London and the Home Counties who could fall into problem debt to:
- Budget wisely
- Don’t keep up with the Joneses
- Don’t apply for credit that’s not needed
- Use savings to pay off debts, and
- Learn to be more like a Shetland Islander
This advice hasn’t changed. We should all remember that while poverty and debt is linked, you can have debt without poverty. If you find yourself in this situation please read some of our other blogposts to understand what you can do, and when you need to contact us.
London has an image problem in the eyes of the rest of the country that isn’t going to change for years to come. However we mustn’t forget that within London there are areas - rich and poor - where personal debt is endemic. In the end London residents have the same debt problems as anywhere else in the UK, despite the myth.
If you need debt help, don’t let your capital become a pain. Contact us on 0800 138 1111 or use our online counselling service Debt Remedy.