Some 17% of London adults are “over-indebted” compared to the national average of 15%.

The FCA describes “over-indebted” as finding it a heavy burden to keep up with bills and credit commitments.

On average, UK adults owe £3,320 in unsecured debt, with the average debt-holder owing £9,570. But 11% of outer Londoners owe £10,000 or more in unsecured debt, just behind some areas of Scotland.

Londoners are twice as likely to rent their homes (42%) compared to 23% in the South East. When it comes to mortgage debt, 23% of those in London have a mortgage debt at least four times their household income (£202,000), compared with just 4% of those living in the North East. The lowest average mortgage debts are carried by adults in the North East (£82,000).

State pension

And people living in the capital are more reliant on the state pension, according to the survey of 13,000 consumers nationwide.

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The national average of adults with no private pension stands at 31% but this rises to 34% in London. Some 53% of retirees living in London cite the state pension as their main source of income in retirement, compared with an average of 44%.

A worrying statistic reveals that 1.3 million adults nationwide do not have access to a bank account, and London alone accounts for 20% of the unbanked population.

Satisfaction with financial circumstances is lower in London compared to rural areas of the country – just 16% of people in the capital are satisfied compared with a national average of 21%.

But household income is the highest in London of any region and much higher than the UK average (£63,000 vs £46,000), according to the FCA, and London residents are also likely to have higher qualifications and fewer health issues.

However, levels of saving in the capital are below the national average – 28% of adults in London have no savings or investment products.

Two thirds (65%) of UK adults have no life insurance or other protection cover, more so in London (72%) and in core cities (70%).

All that glitters is not gold

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said the streets of London may be paved with gold, but the houses are built from solid debt.

“The highest average household earnings in the country (£63,000) don’t make up for the cost of housing and higher prices, so Londoners are working to pay their debts – and have little time to build up savings, investments or pensions. It’s no wonder that only 16% in the city are very happy with their financial lives (compared with the UK average of 21%).

“City-dwellers around the country suffer the same problems – to a lesser extent. More people in urban areas borrow money (77% of people compared to 68% in rural areas), more have been overdrawn in the past 12 months (27% compared to 20%), and more carry debt on a credit card (20% as opposed to 14%). It’s one of the reasons why they struggle to free up money to save for retirement.”