Social and short-term renters along with those living in seaside towns are among those suffering the highest rates of personal insolvency anywhere in the country.
Half of the towns in the top ten list for the highest insolvency rates are located on the coast and four of these are in south west England.
Experian found that social renters living in urban areas saw the biggest deterioration in insolvencies over the past year– up from 8 to 12 per 10,000 households. Younger families on limited budgets continue to experience the highest rate of insolvencies overall at 16 in every 10,000 households. Single people privately renting short-term and low cost homes suffered the second highest number of insolvencies - 13 in every 10,000 households.
These figures highlight where the need for responsible lending is greatest, and where Experian is urging credit providers to fully assess affordability in their lending decisions. The patchy nature of economic recovery in certain pockets of the country highlights the importance of credit providers understanding each individual’s circumstances.
Jonathan Westley, Managing Director of Experian’s Consumer Information Services UK & Ireland commented: “It’s clear that the economic recovery has still not spread to all areas, as coastal towns in particular are struggling to stay afloat and still have high levels of insolvency. The same can also be said of young families and some people in ‘Generation Rent’, as many young and social renters find it as challenging as ever to make ends meet. It’s these areas where the need for responsible lending is greatest.
“At Experian we are able to offer help in three ways. We support free debt advice through funding, free credit reports and expert training, and we encourage people to think about personal debt and advise on the positive steps people can take to manage and improve their credit scores. Finally, we work with lenders to give them the insight to treat customers fairly while taking account of affordability.”
Once again, Skipton in North Yorkshire saw the biggest recovery in the country year on year, with rates decreasing from 13 in every 10,000 households in Q1 2014 to 9 in every 10,000 households in Q1 2015. Meanwhile, Woolwich in South East London saw the biggest recovery in the country compared to the previous quarter, with rates decreasing from 15 in every 10,000 households in Q4 2014 to 6 in every 10,000 households in Q1 2015.
Only high earning families saw a positive improvement in the insolvency rate year on year, with all other groups suffering a worsening rate or remaining static. However, despite still suffering the highest rate of personal insolvencies overall in Q1 2015, families with limited resources saw the biggest improvement compared to the previous quarter, declining from 19 in every 10,000 households in Q4 2014 to 16 per 10,000 households in Q1 2015.
The national average for personal insolvencies worsened slightly year on year, from 6 in every 10,000 households in Q1 2014 to 7 in Q1 2015. This headline figure is, however, an improvement on the Q4 2014 figure of 9 insolvencies in every 10,000 households.
Source - Experian