Londoners more likely to struggle with debt
Londoners are nearly twice as likely as the UK average to be overindebted and less likely than average to know exactly how much they owe according to research from online credit report service MyCallcredit.
However, its research also showed the vast majority of Londoners say they are comfortable with their debts and a quarter expect to be using a lower proportion of their monthly income to service their unsecured debts in a years time.
MyCallcredit director Alison Nicholson says:
"Londoners are doing ok with debt on the whole, only three out of five Londoners has unsecured debts and nine out of ten of those say they are comfortable with those debts.
However, there is a higher number than average who do say their debts are a struggle and a higher number than average who are paying a large enough proportion of their monthly income to service their debts to be considered overindebted. They need to get help to manage their finances now before the situation gets any worse.
The industry also needs to do its bit by continuing to develop more responsible lending practices, like introducing true affordability checks at the time a credit application is made
And individuals need to take stock of their overall financial position to make sure they are applying for credit responsibly."
- 56.6 per cent of Londoners know exactly how much they owe compared to 55.8 per cent nationally
- Of the Londoners who have debts 91.5 per cent are comfortable with them compared to 92.7 per cent nationally.
- No-one in London said they were out of depth with their debts compared to 1.6 per cent in Scotland and 0.7 per cent nationally.
- 17.9 per cent of Londoners haven't got a clue how much they owe in comparison to 19.9 per cent across the UK.
- The Department of Trade and Industry considers anyone who is paying 25 per cent or more of their income to service unsecured debts overindebted.
- 9.5 per cent of Londoners are paying more than 30 per cent of their monthly income to service unsecured debts compared to a UK average of 5.2 per cent.
- 25.5 per cent of Londoners think they will be paying less of their income to service unsecured debt repayments in a year's time compared to 20.8 per cent across the UK.
- The research was carried out for MyCallcredit by NEMS market research among 1001 adults between 18 May and 25 May 2006.