Young adults see biggest improvement in personal insolvencies

Nottingham, UK, 8 September 2011: New analysis from Experian®, the global information services company, reveals that young adults across a range of income groups have seen the most significant improvements in insolvency levels.

The Insolvency Service [1] recently revealed that 36,584 people became insolvent during April, May and June 2011 across England, Wales, Scotland and Northern Ireland, 10 per cent fewer than the same period in 2010.

Experian’s analysis using Mosaic, its consumer classification tool, reveals that young, well educated professionals making up the Liberal Opinions demographic experienced the biggest improvement in insolvency levels. 1,913 individuals from this group became insolvent during Q2 2011, 26 per cent fewer than the same period in 2010.

Young people on limited incomes living in council accommodation also experienced an improvement. 1,884 individuals from the Upper Floor Living demographic became insolvent during Q2 2011, a 22 per cent decline on 2010 levels.

The Mosaic group which recorded the largest share of those declared insolvent continues to be Ex-Council Community, typified by individuals who have created a comfortable lifestyle for themselves and live on council estates where a large proportion of the residents have exercised their right to buy. This group accounted for almost 15 per cent of all UK insolvencies in Q2 2011.

Geographical analysis

Experian’s analysis also examines which towns have seen the greatest changes in personal insolvencies over the past year. Putney and Chiswick in Greater London experienced the UK’s biggest drop of insolvencies in Q2 2011 with just one in every 10,000 becoming insolvent, 78 per cent fewer than during same period in 2010. Windsor experienced the second largest drop, falling 74 per cent to just two per 10,000 households.

Not faring as well was Scotland, the North and the East Midlands which remain the regions with the highest rate of insolvencies with 12 in every 10,000 households becoming insolvent in Q2 2011.

Brentwood in Essex saw a sharp rise in insolvency levels, jumping 47 per cent to seven in every 10,000 households over the past year. Evesham in Worcester experienced the highest rise in personal insolvency levels, with an average of 12 in every 10,000 households experiencing personal insolvency, an increase of 48 per cent compared to Q2 2010.

Simon Waller, Head of Collections for Experian UK and Ireland, commented: “Despite personal insolvencies dropping as a whole and the younger groups making significant strides to improving their insolvency rate, the data from the second quarter shows a number of geographic and demographic variances. With some groups struggling to remain solvent in the current financial climate, it underlines why it is vital that lenders have the latest credit risk and collections capabilities to maintain a real-time view of each customer and understand their ability to meet their credit commitments.”

Personal insolvencies by demographic

  Mosaic Group split of personal insolvencies (Q2 2011)

Mosaic Group

Description

Insolvencies

Change from

Q2 2010

Ex-Council Community

Practical and enterprising people who have created comfortable lifestyles for themselves. Many live on pleasant well-built council estates where a large proportion of residents have exercised their right to buy.

5,305

-10%

Suburban Mindsets

Mostly married or middle aged people, bringing up children in family houses. Some commute to city jobs from affluent suburbs while others earn good wages from manufacturing jobs close to where they live.

3,922

-8%

Industrial Heritage

Traditional people living in communities historically dependent on mines, mills and assembly plants. Typically married and approaching retirement, many work in offices and shops although large proportions still derive incomes from manual and craft skills.

3,673

-1%

Terraced Melting Pot

Poorly educated people working in relatively menial, routine occupations. Majority are young, some still single, others living with a partner with young children. Many belong to groups that have recently arrived in the UK.

3,179

-11%

Small Town Diversity

People living in smaller towns in neighbourhoods of older housing where there is relatively little change in the population. They have friends and family who live nearby and are likely to live the rest of their lives in the same community.

3,055

-6%

Claimant Cultures

Some of the most disadvantaged people in the UK, including significant numbers who have been brought up in welfare dependent families. Common on the periphery of provincial cities which have struggled against declining demand for low skilled labour in docks and maritime industry.

3,025

-6%

Careers and Kids

Young couples whose lives are focused on the needs of their growing children and creating a comfortable family home. Well-educated and established in a technical, junior or middle management careers.

2,305

-6%

New Homemakers

Mixture of young single professionals, young couples starting a family and older people downsizing into modern accommodation living in homes which are likely to have been built only in the last five years.

2,206

-16%

Elderly Needs

Pensioners who can no longer easily manage a house and garden. This group contains a large number those in their 70s, 80s and even 90s, who are no longer as physically active as they once were.

1,921

-11%

Liberal Opinions

Young, professional, well educated people, cosmopolitan in their tastes, liberal in their views, who enjoy the vibrancy and diversity of inner city living. Popular occupations include jobs in journalism, politics, entertainment and the arts.

1,913

-26%

Upper Floor Living

People are on limited incomes renting small flats from local councils or housing associations. Typically these people are young single people or young adults sharing a flat.

1,884

-22%

Professional Rewards

The UK’s executive and managerial classes. Often in their 40s, 50s or 60s, some may be owners of small or medium sized businesses whilst others have risen to senior positions in large multinational organisations.

1,738

-4%

Rural Solitude

People who live in small villages, isolated farmhouses or cottages where farming and tourism are the mainstays of the economy. Neighbourhoods have a traditional country way of life with a strong sense of community.

1,266

-6%

Active Retirement

Retired people who have decided to live in a community among people of similar ages and incomes. Likely to have an occupational pension accompanied by savings accumulated during their working lives.

841

-13%

Alpha Territory

The most wealthy and influential individuals in the UK. Have risen to positions of power as owners of businesses, bankers, senior managers in industry or as top lawyers, surgeons or civil servants. Includes small but influential cadre of celebrities in sport, the arts and entertainment.

355

-30%

Source: Experian

Personal insolvencies by major town / territory

Top five (Q2 2011)

Town / Territory

Q2 2011: Insolvencies per 10k households

Q2 2010: Insolvencies per 10k households

Year-on-year change

Kirkcaldy

22

27

-16%

Chester-le-Street

21

27

-24%

Dunfermline

21

24

-14%

Glenrothes

19

27

-29%

Source: Experian

Bottom five (Q2 2011)

Town / Territory

Q2 2011: Insolvencies per 10k households

Q2 2010: Insolvencies per 10k households

Year-on-year change

Kensington

1

4

-64%

Chiswick

1

6

-78%

Richmond (London)

1

5

-70%

Putney

1

6

-78%

Chelsea - Kings Road

2

6

-65%

Source: Experian

Biggest increase (Q2 2010 – Q2 2011)

Town / Territory

Q2 2011: Insolvencies per 10k households

Q2 2010: Insolvencies per 10k households

Year-on-year change

Evesham

12

8

48%

Brentwood

7

5

47%

Sutton Coldfield

9

7

33%

Llandudno

15

12

24%

Chichester

10

8

24%

Source: Experian

Biggest decrease (Q2 2010 – Q2 2011)

Town / Territory

Q2 2011: Insolvencies per 10k households

Q2 2010: Insolvencies per 10k households

Year-on-year change

Chiswick

1

6

-78%

Putney

1

6

-78%

Windsor

2

9

-74%

Richmond (London)

1

5

-70%

Wandsworth - Clapham Junction

2

7

-66%

Source: Experian

ENDS

Contact:

Jennifer Comerford / Duncan Skehens
Lansons Communications
020 7490 8828
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 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.

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 2011 was US$4.2 billion. Experian employs approximately 15,000 people in 41 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil. 


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[1] Insolvency Service, 5 August 2011: Insolvencies in the second quarter 2011 (http://tinyurl.com/3fx2n46)