Seaside towns, however, hit hardest by personal insolvencies despite overall drop
Nottingham, UK, 29th August 2014 - New figures published today by Experian, the global information services company, reveal an overall decrease in personal insolvencies across the UK during the second quarter of 2014 (April – June 2014), with the biggest drop coming from those households on low incomes who live in small towns - a group which has seen a marked fall in insolvency rates over the past few years.
Seaside towns are a prominent feature in the UK top ten towns for highest insolvency rates, with some seeing an increase on already high rates. Between April and June 2014, the coastal towns of Torquay, Skegness, WestonSuper-Mare, Rhyl, Plymouth and Great Yarmouth recorded some of the highest levels of personal insolvencies in the UK, with considerably higher rates than the national average of 10 in every 10,000 households. They are joined by towns in the North such as Barnsley, Accrington and Washington. Torquay ranked highest with an increase in rates from 19 in every 10,000 households to 21 in every 10,000 households.
In contrast, towns that showed the strongest signs of recovery include Hayward Heath and Dorchester who both saw insolvency rates decrease by 8 in every 10,000 households respectively in Q2 2014.
Experian’s analysis of personal insolvencies using its Mosaic people classification revealed that while most groups experienced a fall in personal insolvency rates, the biggest decrease came from those in the Rural Reality group – a mix of families, mature couples and older singles living in rural locations in inexpensive housing. They tend to be on moderate incomes of around £20-£29K, mostly from employment with local firms or from running their own small business. This demographic saw an overall drop in insolvency rates from 12 in every 10,000 households in Q2 2013 to 9 in every 10,000 households in Q2 2014.
Similarly, households in the Family Basics group saw a fall in insolvencies from 23 in every 10,000 households in Q2 2013 to 21 in every 10,000 households in Q2 2014. However, these households, which are families with school age children, living on limited budgets often in areas with fewer employment options, still see the largest share of individuals being declared insolvent.
The Municipal Challenge demographic bucked the trend of decreasing insolvencies in Q2 2014 and remained at a high rate of 15 out of every 10,000 households. Municipal Challenge is a group of long-term social renters living in low-value multi-storey flats in urban locations, or small terraces on outlying estates. These are challenged neighbourhoods with limited employment options and correspondingly low household incomes. According to the latest data, this demographic has yet to see the benefits of an economic upturn with the personal insolvency rate remaining the same as in Q2 2013.
Jonathan Westley, Managing Director of Experian’s Consumer Information Services UK & Ireland commented: “Falling personal insolvencies is good news for the UK, but there are still many people struggling to make ends meet and if interest rates rise, their ability to pay their bills or make their loan or mortgage repayments could be affected.
“What this means for all credit providers in the UK, whether they are lenders, utilities or telecommunication providers, is that in order to ensure people are treated fairly and responsibly and protected from increasing levels of debt, they need to be able to understand exactly what financial pressures a person is under elsewhere in their lives.”
Experian is the leading global information services company, providing data and analytical tools to clients around the world. The Group 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 March 31, 2014, was US$4.8 billion. Experian employs approximately 16,000 people in 39 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.