Hello Emma. That is really ridiculous behavior from that woman you tried to help in Trafalgar Square! Screaming and all that! Good heavens! I'm sorry that happened to you. For that family not to realize that a nice person was just trying to help them means, I guess, that they were already on edge. Normal behavior would have been for them to say to you, "Thank you! Didn't realize he'd dropped this." and continue on calmly.
You raise many excellent points. With all due respect to you and your excellent posts, I will just comment on and discuss some of these points.
"Whether you use a moneybelt is a personal choice. No rights or wrongs."
"Yes crime happens everywhere but it's helpful to realise that its incidence varies greatly, so behaving as you would in "a hot bed of thieves" probably isn't appropriate for 99% of your trip."
Agree here also. There is no need to worry and look over your shoulder constantly. What a miserable trip that would be.
"I know I'm a stuck record but I'll keep saying it, I think this site, and many of the discussions on it, over exaggerates the risk which I am not sure is particularly helpful to nervous or inexperienced travellers."
Very well could be. This is a very good point.
But it would not be helpful to travelers to pretend there are no pickpockets anywhere. No one here advocates going bonkers like the woman Emma encountered in Trafalgar Square. She must have some kind of anxiety problem even when she's at home, surely.
This is not normal behavior for tourists. Just as it is not true to say there are pickpockets around every corner in London (we don't say that here), it is not true to assume every tourist in London has been worked up into being a bundle of nerves by what they have read here on the RS London forum.
I don't know about the other travel forums, because I don't read them. Maybe they are indeed overstating the risks of pickpockets in London and alarming tourists unnecessarily.
"So just because you think you have seen another one of those thieves in action it doesn't mean you have."
I am absolutely certain of the two instances I experienced. The first one, I saw the man's hand coming out of my purse, with cash under his thumb. I doubt seriously he was trying to put money into my purse. (Couldn't grab it quickly enough.)
The second instance, in the Tower of London, I'm pretty sure that when I find a hand in my pocket, and it's not my own hand, I am being pickpocketed.