Talking to the Residents of London's Most Indebted Postcode

(Photo via taxpayersalliance.com/debtclock)

Yesterday, a list ranking UK postcodes by their collective personal debt was unveiled to the internet. Coming in at first place, with an enviable average of £2,311 in outstanding debt per person (and £540,763 overall), is the BA1 9 postcode sector – a suburb of Bath. Next up, with an average of £2,188 per person and £264,784 overall, is EC1V 2 – a stretch of road near Old Street roundabout.

Conveniently, it's also a stretch of road near our office, so we had a walk around and asked residents whether they're cut up about being the nation's second most indebted citizens, or if – like one guy – they "don't even believe" they're in thousands of pounds of outstanding debt.

VICE: Do you have a loan?
Beverley, 29: Yes, with RBS – £5,000 for a holiday, which I took out last year.

Have you paid it off?
I’m paying it off every month – £290 a month – but it’s not finished yet. 290.

Have you had to make any sacrifices now you're having to pay it off?
Not really. It’s obviously a chunk every month, but it’s not a chunk I would have been using for something else. So yeah, it would have been nice to save it for something else, but I’m glad I did it for what I did.

That's good to know. How would you explain the particularly high debt-per-capita rate in this area?
There are a lot of students around here. It’s quite an up and coming area, so I think some people try to live beyond their means. They go out a lot more and they eat out a lot more than they need to, and I think people don’t take that into consideration.

How much debt are you in?
Edward, 31: Well, I've got my student loan, which is about £20,000.

Have you paid it off?
No, nothing – I think between £1 and £2, and I finished my degree about 10 years ago.

Why's that?
Because I’m freelance and I don’t have a huge income. I’ve never gone over the threshold or said that I’ve gone over the threshold, so I’ve never had to pay it.

Are you planning to pay it off ever?
I don’t know. I think after a certain amount of time it just lapses. That’s a pretty long time, though – when I’m about 50. I guess I'll probably have to at some point, but if I never earn a huge amount of money then I wont have to. My plan is to avoid it as long as possible by any means possible. If I can get away with not paying it, I’ll try not to pay it.

How often are you reminded of the debt you are in?
Very rarely. It completely slips my mind – I don't really believe I have it.

Are you in debt?
Maria: No, thank god. Not any more. But I was in £30, 00 pounds worth of debt through credit cards. They were very easy to get.

How many did you have?
Seven.

Seven? What did you spend all that money on?
Anything and everything. I was using all my money to pay my credit card bills off at the end of each month, so I ended up using them again and again. When I had no money I just applied for another credit card, and I'd get another one in the post. It’s that easy.

When did you realise that continuing to do that probably wasn't the best idea?
There was a programme on television – I think the guy was called Alvin, or something like that. He said the best way to do get out of debt is to just start paying them off. His advice was to start with the biggest and work down to the smaller ones, but I did it the other way round.

What advice would you give to people in a similar situation?
When one of those credit card ads comes through the letterbox, tear it up. And never get credit that's more than one months’ wages. That should be a rule for everyone.

Are you in debt?
Claudia, 26: Yeah, about £8,000. In the beginning it was £10,500 from a personal loan I took out for a masters. I think I have another four years of paying it off.

Do you have to make many sacrifices to be able to pay it back?
Between my loan, my rent, my phone bill and groceries I’m pretty much left with about £80 a month. It means that I have to choose between seeing friends and buying make-up, or things like that. It’s really hard, because I used to buy a lot of clothes in uni and I really can’t do any of that. It takes its toll on you because you don’t feel like you look very good for work and socialising. It’s hard when your friends are always out doing more expensive things, and obviously you can’t. It takes a toll on your whole life.

Are you in debt?
James, 32: Yeah, I have a student loan. It’s around £9,000, but I've paid some of it off already.

What do you think about the student loan system?
They're too freely given. I didn’t live with my parents at the time, so I was offered a lot of money and took the maximum amount. There was no warning or anything. People aren't encouraged to earn money for themselves or think of other ways to support themselves. They just get money offered freely, and of course they take it because they're young.

How can that be improved?
I don’t know. Now, house prices are more expensive, rent is more expensive. I have no idea how students do it now. When I was a student I paid like £200 a month for my house, so costs were very low – but I worked all the time as well. I had enough money to support myself. People are getting loans too easily, so they live in debt rather than living within their means.