Insolvency share increases for middle class suburbanites in 2011

Personal insolvencies decreasing overall across the UK

Young professionals see biggest improvement in personal insolvencies

Nottingham , UK , 3 February 2011 – New analysis from Experian®, the global information services company, today revealed that although insolvency continues to be most frequent amongst welfare dependent groups, some middle class families saw their share of insolvencies increase in 2011. Meanwhile, the rate of insolvencies amongst young professionals fell over the last 12 months.

Demographic insight

While figures published today by the Insolvency Service* showed there were  11.3% fewer personal insolvencies in 2011 compared with 2010, Experian’s demographic analysis using its Mosaic classification shows that this decrease was experienced by some consumer groups more than others.

Experian’s analysis showed that the Suburban Mindsets group saw the biggest increase in their share of UK insolvencies in 2011, rising by a total of 56 basis points. This demographic, which includes mostly married or middle aged people, bringing up children in family houses accounted for 10.93 per cent of UK personal insolvencies in 2011, up from 10.37 per cent in 2010.

Young people saw the biggest improvement in their share of personal insolvencies in the last 12 months. The Liberal Opinions group, consisting of young, professional and well educated people experienced the biggest decrease in insolvencies, from 6.14 per cent of insolvencies in 2010 to just 5.40 per cent in 2011. Mosaic’s Upper Floor Living group, consisting of young people on limited incomes living in council accommodation, saw its share fall from 5.90 per cent in 2010 to 5.17 per cent in 2011.

Experian’s data reveals that the largest share of UK insolvencies continues to be in the Ex-Council Community group - typically those living on council estates where a large proportion of residents have exercised their right to buy. This group, which makes up 9.26 per cent of the UK adult population, accounted for a higher share of UK insolvencies in 2011 compared to 2010 with this demographic accounting for 14.54 per cent of insolvencies, an increase of 41 basis points.

Geographical analysis

Despite overall decreases in insolvencies across the UK, Experian’s analysis shows that some regions and towns continued to struggle.

Amongst UK towns, Birmingham saw the biggest increase in personal insolvencies rising by six per cent, with 30 in every 10,000 households experiencing insolvency in 2011, up from 29 in 2010. Middlesbrough and Stirling also experienced rising levels of personal insolvencies, up by five per cent and two per cent respectively.

Richmond in South London experienced the UK’s biggest drop of insolvencies in 2011 where just seven people in every 10,000 households became insolvent, 62 per cent less than last year. Overall London remained one of the least affected regions with four in every 10,000 households experiencing insolvency in 2011 compared to five in every 10,000 in 2010.

Simon Waller, Head of Customer Management and Collections for Experian UK & Ireland, commented:  “Whilst it is encouraging to see that personal insolvencies are declining throughout the UK, there are still pockets of society where financial stress has increased in 2011. Redundancy and relationship breakdown are typically the main reasons for why people to experience serious financial difficulties. Lenders that use data and analytics to better understand the specific circumstances of their individual customers are best placed to assess risk and to manage their customer relationships accordingly.”

 

Consumer groups most prone to personal insolvency

Mosaic Group

Description

% of 2011 insolvent population

Change on 2010
(basis points)

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.

14.54%

41

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.

10.93%

56

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.

9.94%

43

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.

8.70%

-17

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.

8.43%

34

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.

8.29%

9

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.

6.17%

9

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.

5.86%

-51

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.

5.40%

-74

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.

5.17%

-73

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.

5.19%

10

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.

4.75%

29

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.

3.18%

-1

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.

2.38%

-3

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.

1.06%

-11

Source: Experian 2012

Highest concentrations of personal insolvencies by town/territory

Town / territory

Cases per 10k households 2010

Cases per 10k households 2011

Change

Glenrothes

90

76

-16%

Kirkcaldy

89

71

-21%

Dunfermline

77

69

-10%

Hamilton

74

64

-14%

Washington

79

59

-25%

Chesterfield

77

56

-28%

Livingston

88

54

-38%

Torquay

74

48

-35%

Weston-super-Mare

76

46

-40%

Boston

76

44

-42%

Source: Experian 2012

Top increases in personal insolvencies by town

Town / territory

Cases per 10k households 2010

Cases per 10k households 2011

Change

Birmingham Heath

29

30

6%

Middlesbrough

39

41

5%

Stirling

47

48

2%

Source: Experian 2012

Top decreases in personal insolvencies by town

Town / territory

Cases per 10k households 2010

Cases per 10k households 2011

Change

Richmond London

32

20

-62%

Putney

21

9

-56%

Chelsea Kings Road

21

10

-54%

Poole

55

26

-52%

Dorchester

57

30

-48%

Chiswick

27

14

-48%

Queensway

22

12

-48%

Source: Experian 2012

ENDS

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Contact:

Jennifer Comerford / Maddy Morgan Williams

Lansons Communications

0207 294 3678

jenniferc@lansons.com / maddymw@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. 

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

* http://www.insolvencydirect.bis.gov.uk/otherinformation/statistics/201202/index.htm

 

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