A study by Newcastle Building Society found that people in the capital are starting January with an estimated £322.90 of debt after festive spending, once typical living costs and rent are factored in.
This puts London second on the national list for cities with the most post-Christmas debt.
The findings are based on a calculation combining expected living expenses, average rent payments, estimated monthly non-essential spending, and forecast festive spending, set against median city earnings.
Chris Brown, head of savings product propositions at Newcastle Building Society, said: “It may sound simple, but if I could recommend one money management habit I’d love everyone to adopt as a financial New Year’s resolution, it would be to get organised.
“Set a clear savings goal and stick to it.
“Write down all your monthly outgoings so you can see exactly where your money is going – this makes it much easier to spot where you can cut back.
“Don’t forget to reward yourself when you hit your milestones, too.
“Small treats will help keep you motivated, hitting your brain’s reward system in all the right places.
“This will help to make the habit easier to maintain over the long term.”
According to the study, Londoners had median earnings of £3,640.
Average monthly expenses stood at £1,059, with non-essential spending estimated at £171, and rent at £1,608.
Combined, these costs totalled £2,667—leaving those who took part in the research with less than zero after festive spending.
By comparison, Leeds residents were estimated to end December with a positive balance of £335.70, and those in Cardiff with £314.70 remaining.
Other cities finishing the month in the red included Bristol, at minus £66.70, and Brighton and Hove, at minus £349.
Mr Brown joined Newcastle Building Society in January 2025.
He has more than two decades of experience in financial services and focuses on creating savings products that help people reach their financial goals.
The findings highlight the ongoing financial pressures faced by residents in London, where higher living costs and rent continue to outpace earnings for many.
They also underline the impact of seasonal spending on household finances, with the aftermath of Christmas posing fresh challenges as people look to regain control of their money in the new year.
