Rural areas hit by rising personal insolvencies

Analysis published by Experian shows there was an increase in personal insolvencies among people living in small villages and farmhouses last year while the overall number of personal insolvencies across the country fell during 2012.

Experian’s analysis of personal insolvency statistics using its Mosaic people classification revealed that financial hardship increased most among those in the Professional Rewards group, one of the UK’s most affluent sectors. This demographic, which represents company managers and senior executives, typically married with children and living in suburban areas or semi-rural dormitory villages with a long commute to work, saw a rise in personal insolvencies, from 5.15 percent of the total insolvencies across the UK last year during 2011 to 5.6 per cent in 2012.

While the total number of individuals being declared insolvent fell across the country, some areas of the UK, particularly Scotland, continued to struggle. The Scottish town of Clydebank saw the biggest increase in insolvencies last year, rising by 23 basis points in 2012. Furthermore, the top five towns with the highest concentration of personal insolvencies were in Scotland: Edinburgh, Dundee, Aberdeen, Motherwell, and Glasgow (Parkhead).

Towns that showed the strongest signs of recovery were Gloucester, Bournemouth (Boscombe) and Telford, recording the UK’s biggest drop in insolvencies, falling 28, 24 and 21 basis points respectively.

Jonathan Westley, Managing Director of Experian’s Consumer Information Services UK and Ireland, says while it is encouraging to see that personal insolvency levels are continuing to fall in the UK overall, it is clear that there are still pockets of the UK that are feeling the strain:

“It is as important as ever for organisations to be able to identify and segment customers based upon their specific needs and characteristics, enabling fair lending processes to the financially vulnerable. By using data analytics to establish the individual circumstances of customers, lenders will be able to build an overall picture of their financial situation so that they can treat customers sensitively and put in place measures to help the most vulnerable.”