Londoners are saddled with more unmanageable debt than the average UK adult, according to a new survey.
The Financial Conduct Authority (FCA) found that 17% of London adults are “over-indebted”, compared to the national average of 15%.
“Over-indebted” is defined by the FCA as finding it difficult to keep up with bills and credit repayments.
£10,000 or more in unsecured debt
As reported by Your Money, more than one in ten (11%) of outer Londoners were found to owe £10,000 or more in unsecured debt.
On average, UK adults owe £3,320 in unsecured debt, with the average debt-holder owing £9,570.
The survey of 13,000 consumers nationwide also found that people living in London are twice as likely to rent their home (42%) than have a mortgage, compared to 23% in the South East.
As for those living in the UK capital who do have a mortgage, on average their mortgage debt is at least four times their household income (£202,000).
Especially concerning is the revelation that 1.3 million adults nationwide do not have access to a bank account, with London alone accounting for 20% of that figure.
In addition, the research revealed that Londoners are more likely to be reliant on the state pension.
More than a third (34%) of adults in London have no private pension, compared to the national average of 31%, while 53% of retirees living in London cite the state pension as their main source of income in retirement.
On a more positive front, household income is the highest in London of any region (£63,000 on average) and much higher than the UK average (£46,000), with London residents likely to have higher qualifications and fewer health issues.
However, satisfaction with financial circumstances is still lower in London than rural areas of the country
Perhaps this is partly because levels of savings in the capital are below the national average, with 28% of adults in London reportedly having no savings or investments.
Bigger debts in urban areas
As reported by Sky News, the survey also discovered that people living in urban areas have bigger debts than those in the countryside.
It found unsecured debts in rural areas are generally lower with the average amount owed by a town or city resident over a £1,000 more (£3,600) compared with someone in a rural area (£2,510), while those in urban areas were more likely to use high-cost loans to tackle debt.
On top of that, those in the countryside are less likely to be overdrawn or unable to clear their credit card balance each month than those in urban areas.
While those living in London have the highest level of financial problems, the study also found that those living in Yorkshire and the Humber are most likely to be “in difficulty” (11%), compared with the UK average of 8%.
Andrew Bailey, FCA chief executive, said: “This survey shows just how different the experience of financial services is for consumers across the country.
“That’s important for us, as we shape financial services policy. But it is also important for firms, as they decide how best to serve their customers.”
The survey also found more than two thirds of people who never use the internet across the UK live in rural areas, and the take-up of mobile banking in the countryside (23%) is nearly half that in the city (45%), most likely due to dodgier broadband and a greater reliance on banks.