Experian analysis reveals pockets of UK society most at risk of personal insolvency

Experian analysis reveals pockets of UK society most at risk of personal insolvency

  • Traditional married, middle-aged consumer groups see insolvencies increase in 2010
  • Insolvencies falling amongst welfare dependent demographics
  • Glenrothes, Kirkcaldy and Livingston experience highest concentration of UK insolvencies

Nottingham, 30 March 2011 — Experian®, the global information services company, today published new analysis revealing that although insolvency continues to be most frequent amongst welfare dependent groups and those just starting out on professional careers, certain middle-aged, middle class and skilled working class groups bucked the national trendi and saw their share of insolvencies increase in 2010. Meanwhile, the rate of insolvencies amongst a number of the poorest groups fell faster than the national average in 2010.

Demographic insight
By using its Mosaic consumer classification to analyse the insolvency dataii, Experian has found that although instances of personal insolvency continue to be most frequent amongst the most disadvantaged people in the UK, their share of new insolvencies declined in 2010.

The demographic labelled Mosaic as Claimant Cultures, which includes significant numbers who have been brought up in families with a history of welfare dependency, represents just 4.52 per cent of the UK adult population, but accounted for 8.1 per cent of insolvencies in 2010. Members of this group become insolvent at nearly twice the UK average rate, however, its share of insolvencies also fell by 19 basis points in 2010.

Further positive news concerns the Upper Floor Living demographic, which consists of people on limited incomes who rent small flats from local councils or housing associations. Although it continues to be amongst the higher risk groups, it saw its share of insolvencies fall by 21 basis points to 5.92 per cent in 2010.

The young, single professionals and middle income earners that constitute the New Homemakers demographic had the second highest concentration of insolvencies in 2010. This group, which accounts for 3.99 per cent of UK adults, was responsible for 6.36 per cent of insolvencies, up slightly on 2009 levels.

The biggest increase in insolvencies occurred amongst the Suburban Mindsets, mostly married middle class and skilled working class people of middle age, living with their children, which make up 13.16 per cent of UK adults. This group, which can frequently be found working in city centre office jobs or earning good wages on the shop floor of large assembly plants, accounted for 10.34 per cent of personal insolvencies in 2010, 45 basis points higher than the corresponding figure for 2009. Despite this, those in this group remain less likely than the UK average to become insolvent.

The Industrial Heritage group also recorded a substantial increase in its insolvency share. This traditional and conservative demographic of married people approaching retirement age, commonly found living in communities that have historically been dependent on mines, mills and assembly plants for their livelihood, saw its share of insolvencies increase by 41 basis points in 2010, to 9.45 per cent of all cases.

Pockets of insolvency
Experian’s analysis also reveals a significant increase in personal insolvencies across a number of Scottish towns. Glenrothes, Kirkcaldy and Livingston experienced the highest concentration of personal insolvencies across the UK, as rates increased by 20 per cent, 12 per cent and 32 per cent respectively. More than 80 individuals in every 10,000 households became insolvent in these areas, around twice the average rate of the UK as a whole.

Washington in Tyne and Wear also had a high concentration of personal insolvencies. 77 people in every 10,000 households became insolvent in 2010, although this was down 15 per cent on 2009 levels.

London’s Kensington, Wimbledon, Richmond and Chelsea areas had the lowest concentration of personal insolvencies in 2010. Insolvencies in each area were down significantly on 2009 levels, with less than 20 individuals in every 10,000 households became insolvent.

Simon Waller, Head of Collections at Experian in the UK and Ireland, commented: “While it is encouraging to see a small reduction in personal insolvency levels across the UK, there are certain sections of society that continue to face ongoing difficulties. The recession hit different people and communities at different stages and some are finding it harder to shake off its effects.

“Lenders that understand their customers’ credit behaviour, how it might change in the future and can react rapidly to signs of financial distress are best placed to manage their books in a responsible and sustainable way.”


i  Source: The Insolvency Service, 4 February 2011, http://bit.ly/hSFgP9 . Official statistics have revealed that there were 157,741 personal insolvencies across England, Wales, Scotland and Northern Ireland in 2010, one per cent fewer than in 2009 (159,583)
ii  Experian analysed data provided by The Insolvency Service which is included in its range of credit services

Chantal Heckford / Jennifer Comerford / Duncan Skehens
Lansons Communications
020 7490 8828
chantalh@lansons.com / jenniferc@lansons.com / duncans@lansons.com

About Experian
Experian is the leading global information services company, providing data and analytical tools to clients in more than 90 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2010 was $3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and São Paulo, Brazil.

For more information, visit http://www.experianplc.com .