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Insolvencies rise amongst wealthy, rural dwellers and pensioners
4 years ago at 10:43


New analysis from Experian®, the global information services company, today revealed that – while insolvencies in the UK continue to be most prevalent amongst welfare dependent groups – there was an increase in the levels of wealthy individuals, rural residents and pensioners being declared insolvent in the last quarter.


Demographic insight

Figures published today by the Insolvency Service showed there were 4.7% per cent fewer personal insolvencies in Q1 2012 compared with the same quarter in 2011. Experian’s demographic analysis using its Mosaic classification also reveals that insolvency levels amongst young professional groups decreased  the most over the last 12 months.


Experian’s data reveals a surprising increase in the number of insolvencies amongst the Alpha Territory group, the most wealthy and influential individuals in the UK.  Insolvencies amongst this demographic bucked the national trend, rising by 25 basis points from the previous quarter.


Those in the Active Retirement group, consisting of retirees likely to be on an occupational pension, and the Rural Solitude segment, people living in small villages, saw their proportion of insolvencies increase since Q4 2011. These groups saw 2.70 per cent and 3.35 per cent of insolvencies respectively in January to March this year.


The largest share of UK insolvencies continues to be from the Ex-Council Community classification - typically individuals living on council estates where a large number of residents have exercised their right to buy.  This group, which makes up 9.26 per cent of the UK adult population, accounted for 14.6 per cent of all insolvencies, a rise of 23 basis points compared to the same quarter last year.


Young professionals experienced the biggest drop in their share of personal insolvencies in the last 12 months.  The New Homemakers group, typically young professionals who have recently bought a new home, saw its proportion of insolvencies decrease by 41 basis points to 5.39 per cent in Q1 2012.  The Liberal Opinions group, consisting of young, professional and well educated people also experienced a fall in its share of insolvencies, from 5.76 per cent in Q1 2011 to 5.38 per cent in Q1 2012.


Geographical analysis

Experian revealed that while the total number of individuals being declared insolvent had fallen across the country, some pockets of the UK continued to struggle.  St Albans saw the biggest increase – some 31 per cent – with five in every 10,000 households encountering insolvency in Q1 2012, compared to four in every 10,000 households this time last year. Birmingham Central and Skipton also saw rising levels of personal insolvencies, up by 21 per cent and 20 per cent respectively.


Poole, the large coastal town of Dorset recorded the UK’s biggest drop in insolvencies, with just three people in every 10,000 households being declared insolvent, 69 per cent less than Q1 2011.  London remained one of the least affected regions with four in every 10,000 households experiencing insolvency in Q1 2012, compared to six in every 10,000 in Q1 2011.


Simon Waller, Head of Customer Management and Collections for Experian UK & Ireland, commented:  “Although it’s positive news that personal insolvency levels are continuing to fall in the UK overall, it is clear that this positivity is not being felt uniformly across the country.


“Understanding that an individual’s circumstances as well as their environment can impact their ability to meet their credit commitments is critical for when assessing portfolios. By using data and analytics to identify the specific needs and characteristics of customers, lenders can better identify those that are genuinely struggling to service their household bills and credit commitments so they can treat them sensitively and according to their individual circumstances.”


Accompanying tables can be viewed here

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