Low to middle income families see the highest rates of personal insolvency in the UK in the past year (Q3 2013 – Q3 2014)
Nottingham, UK, 9 December 2014 - New figures published today by Experian, the global information services company, illustrating where and for whom UK personal insolvencies are most prevalent, reveal the number of people being declared insolvent has fallen to pre-recession levels, with some towns showing markedly improved rates compared to the same period last year. Despite these findings, the figures also highlight the vulnerability facing young families.
Demographic insight
Experian’s analysis of personal insolvencies using its Mosaic people classification system has revealed that families on low to middle incomes in the Family Basics group saw worryingly high levels of personal insolvency with 20 in every 10,000 households becoming insolvent in Q3 2014. However, this is an improvement on their Q3 2013 rate of 22 in every 10,000 households.
There were generally positive signs amongst other Mosaic groups. The Rural Reality group - people living in inexpensive homes in rural village communities – saw the biggest improvement year on year from 11 in every 10,000 households becoming insolvent, decreasing to 8 in every 10,000 households in Q3 2014.
The Suburban Stability group, which typically consists of mature couples or families living in mid-range housing, also saw improved rates falling from 8 in every 10,000 households in Q3 2013, to 6 in every 10,000 households in Q3 2014.
Jonathan Westley, Managing Director of Experian’s Consumer Information Services UK & Ireland commented: “It’s encouraging to see insolvency rates falling back to pre-recession levels and there have been some real pockets of success in the last year, which is proven in the year to date comparison. The insolvency rates either improved or remained the same amongst all Mosaic groups, so we appear to be heading in the right direction. However, there insolvencies amongst young families are still relatively high, suggesting they are struggling to make small budgets work.
“This highlights how important it is for credit providers to be able to really understand the personal circumstances of those who may be struggling to make ends meets, so that they can help to protect them from falling further into debt.”
Geographic analysis
Geographic analysis reveals that of the top 50 UK towns with the highest rates of personal insolvency, 34 are located in the north of England, while only seven towns are in the south - Torquay, Penzance, Newport (Isle of Wight), Dorchester, Sittingbourne, Aldershot and Bath.
While many areas of the UK have shown an improvement in insolvency rates, the seaside town of Scarborough is still suffering from the highest levels of personal insolvency in the UK with 19 out of every 10,000 households being declared insolvent in Q3 2014, although this is a slight improvement on the corresponding quarter in 2013 when 20 in every 10,000 households were declared insolvent.
Despite some pockets of the UK showing deterioration, many more towns showed a marked improvement from the insolvency rates of Q3 2013. Bromsgrove in Worcestershire showed by far the biggest recovery over the last 12 months with rates decreasing from 14 in every 10,000 households in Q3 2013 to three in every 10,000 households in Q3 2014.
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NOTES TO EDITORS
| Mosaic Group | Description | Insolvency rate per 10,000 households Q3 2013 | Insolvency rate per 10,000 households Q3 2013 |
|---|---|---|---|
| Family Basics | Family Basics are families with children who have limited budgets and can struggle to make ends meet. Their homes are low cost and are often found in areas with fewer employment options. | 22 | 20 |
| Suburban Stability | Suburban Stability are typically mature couples or families, some enjoying recent empty-nest status and others with older children still at home. They live in mid-range family homes in traditional suburbs where they have been settled for many years. | 8 | 6 |
| Modest Traditions | Modest Traditions are older people living in inexpensive homes that they own, often with the mortgage nearly paid off. Both incomes and qualifications are modest, but most enjoy a reasonable standard of living. They are long-settled residents having lived in their neighbourhoods for many years. | 13 | 12 |
| Urban Cohesion | Urban Cohesion are settled extended families and older people who live in multi-cultural city suburbs. Most have bought their own homes and have been settled in these neighbourhoods for many years, enjoying the sense of community they feel there. | 8 | 8 |
| Transient Renters | Transient Renters are single people who pay modest rents for low cost homes. Mainly younger people, they are highly transient, often living in a property for only a short length of time before moving on. | 17 | 16 |
| Rural Reality | Rural Reality are people who live in rural communities and generally own their relatively low cost homes. Their moderate incomes come mostly from employment with local firms or from running their own small business. | 11 | 8 |
| Domestic Success | Domestic Success are high-earning families who live affluent lifestyles in upmarket homes situated in sought after residential neighbourhoods. Their busy lives revolve around their children and successful careers in higher managerial and professional roles. | 6 | 5 |
| Aspiring Homemakers | Aspiring Homemakers are younger households who have, often, only recently set up home. They usually own their homes in private suburbs, which they have chosen to fit their budget. | 13 | 11 |
| Rental Hubs | Rental Hubs contains predominantly young, single people in their 20s and 30s who live in urban locations and rent their homes from private landlords while in the early stages of their careers, or pursuing studies. | 9 | 8 |
| Municipal Challenge | Municipal Challenge are 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. | 14 | 13 |
| Vintage Value | Vintage Value are elderly people who mostly live alone, either in social or private housing, often built with the elderly in mind. Levels of independence vary, but with health needs growing and incomes declining, many require an increasing amount of support. | 12 | 10 |
| Prestige Positions | Prestige Positions are affluent married couples whose successful careers have afforded them financial security and a spacious home in a prestigious and established residential area. While some are mature empty-nesters or elderly retired couples, others are still supporting their teenage or older children. | 3 | 2 |
| Country Living | Country Living are well-off homeowners who live in the countryside often beyond easy commuting reach of major towns and cities. Some people are landowners or farmers, others run small businesses from home, some are retired and others commute distances to professional jobs. | 5 | 4 |
| Senior Security | Senior Security are elderly singles and couples who are still living independently in comfortable homes that they own. Property equity gives them a reassuring level of financial security. This group includes people who have remained in family homes after their children have left, and those who have chosen to downsize to live among others of similar ages and lifestyles. | 5 | 4 |
| City Prosperity | City Prosperity work in high status positions. Commanding substantial salaries they are able to afford expensive urban homes. They live and work predominantly in London, with many found in and around the City or in locations a short commute away. Well-educated, confident and ambitious, this elite group is able to enjoy their wealth and the advantages of living in a world-class capital to the full. | 3 | 2 |
Contact:
Maddy Morgan Williams / Sarah Muir
Lansons Communications
020 7490 8828
maddymw@lansons.com / sarahm@lansons.com
About Experian
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