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Latest national research from Experian shows personal insolvency has dropped by 14% PDF Print E-mail
Tuesday, 06 December 2016
Young, often single parents are the most likely to become insolvent, according to new analysis by Experian. The research found that ‘new parents in need’ continues to be the group most likely to experience serious financial difficulties in the country, with 10 insolvencies in every 10,000 households in the third quarter (July to October) of 2016.

‘New parents in need’ are typically bringing up young children in social housing and facing considerable disadvantage. This group of ‘just about managing’ families is barely scraping by financially and has the greatest difficulty accessing and managing credit, often relying on high-cost borrowing and unofficial doorstep lenders. They tend to be based in parts of major English cities such as Nottingham, Sheffield, Manchester and Liverpool and in the Teesside area.

While ‘new parents in need’ are among a number of groups most financially vulnerable in society, the overall situation for personal insolvencies across the UK is improving. The number of people facing insolvency between July and October 2016 dropped by 14%, compared with the same period in 2015, while the number is down 34% over a three-year period. A total of 19,583 people became insolvent during this period, with a slightly higher number of women (53%) becoming insolvent than men (47%).

Experian’s Jonathan Westley said: “It’s encouraging that the overall rate of personal insolvencies is falling across the UK. However, our analysis shows that young parents in particular are finding their finances are being stretched to the point they need to file for insolvency. It is vital lenders and service providers gain a full understanding of a person’s financial situation so they can make affordable lending decisions for the long term.”

Individual voluntary arrangements (IVAs) were the most common insolvency type, making up 38% of all insolvencies in the UK. 29% opted for debt relief orders (DROs), while 26% chose bankruptcy, in line with a similar trend for the same period last year.

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