Locations in the North of England and seaside towns are suffering high
rates of personal insolvency, with young families on limited budgets
struggling the most.
Experian’s data shows that 19 out of 30 towns with the highest rates of insolvency are located in the North of England and North Wales. Seaside towns are also continuing to struggle: Torquay, Scarborough and Penzance have the highest rates of personal insolvencies anywhere in Great Britain. Torquay tops the list with 19 out of every 10,000 households being declared insolvent in Q4 2014.
Experian’s analysis using its Mosaic people classification system reveals hard-pressed and vulnerable young families with squeezed budgets in the Family Basics group continue to find their circumstances difficult. Once again they have the highest rate of personal insolvencies of any group, down from 21 to 19 in every 10,000 households in Q4 2013 vs 2014.
It is in these areas and within these sectors where the need for responsible lending is greatest. Experian is helping by encouraging consumers to think about personal debt management and working with lenders to give them greater insight enabling businesses to treat customers more fairly while taking account of affordability.
Jonathan Westley, Managing Director of Experian’s Consumer Information Services UK & Ireland commented: “Insolvency rates within young families and across some key coastal towns and locations in the North remind us there is still some way to go in terms of recovery. Many people are still on stretched budgets further highlighting the need for credit providers to recognise circumstances unique to each individual, enabling their money to go further and help support them against debt.
“At Experian we’re actively working with debt advisors to provide them with guidance and expert advice around credit matters and on the positive steps people can take to manage and improve their credit scores.”
In the last three months Experian has reached over 900 debt advisors with free advice and guidance on how they can help people with personal debt management and improve credit awareness.
Overall the picture is improving and the signs for 2015 are positive with personal insolvencies in Great Britain falling from 10 in every 10,000 households in 2013, to nine in every 10,000 households in 2014. This is also reflected by the Q4 year–on-year figures, which also show a decline from 10 to nine in every 10,000 households in 2013 and 2014 respectively – the lowest Q4 rate since 2009.
Geographically, Skipton in North Yorkshire bucked the prevailing trend and saw the biggest improvement in the country year-on-year: 13 in every 10,000 households were declared insolvent in Q4 2013 compared with six in every 10,000 households in Q4 2014. Stratford-upon-Avon in South Warwickshire also showed strong signs of recovery with a drop in insolvency rates from 12 in every 10,000 households in Q4 2013 reducing to five in every 10,000 households in Q4 2014.
Jonathan Westley concluded: “The good news is that we’re on the right path and it’s promising that overall insolvency rates are steadily declining. The current low mortgage interest rates may well have aided the improvements we’ve seen among many groups, including the Aspiring Homemakers, those young people who have recently set up home.”
Experian’s Mosaic analysis reveals that every demographic group has also seen a reduced rate of personal insolvency compared with Q4 2013. The Aspiring Homemakers group - younger households settling down in housing priced within their means - saw the biggest improvement year-on-year, from 13 in every 10,000 households being declared insolvent in Q4 2013, to 10 in every 10,000 households in Q4 2014.
The Suburban Stability group, which comprises mature suburban house owners living settled lives, also experienced a reduction in the insolvency rate from seven in every 10,000 households in Q3 2014, to five in every 10,000 households in Q4 2014.
(Source - Experian News Release)