Insolvencies increase for middle-aged in UK’s industrial heartlands
Windsor experiences sharpest rise in personal insolvency levels during Q1
Young professionals see biggest improvement in personal insolvencies
Nottingham, UK, 22 June 2011 - New analysis from Experian, the global information services company, reveals that elements of Britain’s married, middle-aged consumer classes saw their share of personal insolvencies increase in the first quarter of 2011, compared to the same period last year. At the opposite end of the scale, young professionals experienced the biggest improvement in personal insolvencies.
Demographic insight
While figures published by the Insolvency Service [1] recently showed there was 4.5 per cent fewer personal insolvencies in Q1 2011 compared with the same period in 2010, Experian’s analysis using Mosaic, its consumer classification, reveals that certain groups saw their share of insolvencies increase year-on-year.
Mosaic’s Industrial Heritage group recorded the biggest increase in insolvencies – up by 43 basis points in Q1 2011, to 9.59 per cent of all cases. This traditional and conservative group of married people approaching retirement age, is commonly found living in communities that have historically been dependent on mines, mills and assembly plants for their livelihood,
The Mosaic group which recorded the largest share of UK insolvencies continues to be Ex-Council Community. This group is typically represented by people who have created a comfortable lifestyle for themselves, with many living on council estates where a large proportion of residents have exercised their right to buy.
This group, which makes up 10.6 per cent of the UK adult population, accounted for 14.07 per cent of UK insolvencies in Q1 2011, an increase of nine basis points in Q1 2010.
At the other end of the scale, the Liberal Opinions group experienced the biggest improvement in insolvency levels. This group represents young, professional people who have benefited from a university education and work as professionals, often living in inner city locations. This group had a 9.59 per cent share of UK insolvencies in Q1 2011, an improvement of 74 basis point on the previous year.
The Claimant Cultures group - some of the most disadvantaged people in the UK, including significant numbers who have been brought up in welfare dependent families – are still the group at the highest risk2 of becoming insolvent, making up 4.52 per cent of the adult population but 8.39 per cent of the insolvent population. However, this group’s share of insolvencies has decreased by seven basis points since Q1 2010.
Geographical analysis
Experian also examined which towns have seen the greatest changes in personal insolvencies over the past year. Windsor experienced the highest rise in personal insolvency levels, with 11.60 in every 10,000 households revealed to be insolvent, an increase of 50 per cent compared to Q1 2010. Dumfries also saw a sharp rise in insolvency levels, jumping 39 per cent to 8.81 in every 10,000 households over the past year.
Richmond in Greater London experienced the UK’s biggest drop of insolvencies in Q1 2011. Just 2.34 per 10,000 households were found to be insolvent, 68 per cent fewer than during same period in 2010. Maidenhead experienced the second largest drop, falling 62 per cent to 3.15 per 10,000 households from.
Simon Waller, Head of Collections for Experian UK and Ireland, commented:
“Despite the number of personal insolvencies dropping year on year, there are some noticeable differences across demographics and areas of the country. This means it is even more important that lenders have the most complete picture possible of those that are struggling to service their household bills and credit commitments so they can treat them sensitively and according to their individual circumstances.”
2 Each group’s risk of insolvency was calculated by comparing its share of the total new insolvents in 2011 with its representation within the overall UK adult population
Groups most at risk from personal insolvencies Q1 2011
Mosaic Group |
Description |
% of UK adult population |
% of 2010 insolvent population |
Change from Q1 2010 |
2011 risk of insolvency[i] |
Claimant Cultures |
Some of the most disadvantaged people in the UK, including significant numbers who have been brought up in welfare dependent families. People tend to live with their children on large overspill estates on the periphery of provincial cities which have struggled against declining demand for low skilled labour in docks and maritime industry. |
4.52% |
8.39% |
-7 |
186 |
New Homemakers |
People living in homes built recently to cater for the increasing proportion of one person households. Consists of a variety of young professionals, flat sharers, those recently separated and older people downsizing into modern accommodation. |
3.99% |
6.29% |
5 |
158 |
Terraced Melting Pot |
Poorly educated people working in relatively menial, routine occupations. The majority are young, some still single, others living with a partner with young children. Many residents in these neighbourhoods belong to groups that have recently arrived in the UK. |
6.54% |
9.24% |
19 |
141 |
Ex-Council Community |
People who are practical and enterprising, who have created a comfortable lifestyle for themselves through their own hard work. Many live on pleasant well-built council estates where a large proportion of residents have exercised their right to buy. |
10.60% |
14.07% |
9 |
133 |
Industrial Heritage |
Traditional and conservative people living in communities that historically have been dependent on mines, mills and assembly plants for their livelihood. Typically married and approaching retirement, many now work in offices and shops. Large proportions still derive incomes from manual and craft skills. |
7.39% |
9.59% |
43 |
130 |
Upper Floor Living |
People on limited incomes, renting small flats from local councils or housing associations. Typically these are young single people or young adults sharing a flat. They may also be single people of older working age or even pensioners. |
4.30% |
5.48% |
18 |
128 |
Source: Experian 2011 | |||||
Biggest increase in personal insolvencies by town (Q1 2010 v Q1 2011) | |||
Town name |
Insolvency rates per 10,000 households Q1 2010 |
Insolvency rates per 10,000 households Q4 2011 |
Percentage increase from Q1 2010 to Q1 2011 |
Windsor |
7.73 |
11.60 |
50% |
Dumfries |
6.33 |
8.81 |
39% |
Crawley |
12.90 |
16.41 |
27% |
Kilmarnock |
11.41 |
13.78 |
21% |
Redhill |
7.67 |
8.95 |
17% |
Source: Experian 2011 | |||
ENDS
About Experian
Experian is the leading global information services company, providing data and analytical tools to clients in more than 80 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.
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[1] There were 35,116 individual insolvencies in the UK in the first quarter of 2011. This was a decrease of 4.46% on the same period a year ago. http://www.insolvency.gov.uk/otherinformation/statistics/201105/index.htm
[i] Each group’s risk of insolvency was calculated by comparing its share of total new insolvents in 2010 with its representation within the overall UK adult population