Middle classes pawn gems for school fees
MIDDLE-CLASS families hit by the downturn are pawning diamonds and cars to pay school fees, it was claimed today.
London chain TGS Pawnbrokers has seen an upsurge in business from professionals in the past six months, and has launched an online service for clients who prefer not to enter branches.
London's oldest pawnbroker Suttons and Robertsons has also seen a huge rise in the number of "white collar" customers coming in with family heirlooms to pay school fees or mortgages.The Belgravia firm, known as the "Harrods of pawnbrokers", will lend up to £1million.
Director Jim Tannahill has also witnessed the growth of lending for companies: "We're seeing more small businesses coming to us for bridging loans as credit has become harder to obtain."
Andrew Lazarus, co-director of TGS, which has eight outlets in north London, said he is seeing a dramatic rise in the number of customers who want cash in return for valuables.
At least 30 customers last month told TGS employees they were seeking emergency finance to avoid pulling their children out of private education, he said.
Average day-school fees are already £9,069 a year, according to the Independent Schools Council, and six schools nationwide were forced to close last year amid falling demand. "They think it won't be long until they get back on their feet, and they don't want to disrupt their kids' lives," said Mr Lazarus.
He said up to 80 per cent of business is now from professionals, compared with 20 per cent a year ago, adding that many customers are former high-income City workers. Mr Lazarus says the rise is partly due to the launch of the online service, allowing customers to post jewellery. TGS only accepts items it can fit in its safe and has had to turn down "hundreds" of cars and paintings, he said.
"One former banker offered us a vintage Rolls-Royce so I sent him to a more specialist broker.
"We have countless Rolexes - one worth over £100,000 - and Cartier diamonds, but also a beautifully decorated Fabergé egg bought for £65,000."
The company offers up to two thirds of an item's second-hand value for up to seven months.
It charges interest of two to eight per cent a month, equivalent to annual rates of up to 252 per cent.
