Coastal areas of England and Wales have the highest levels of personal insolvency, according to latest figures from the Insolvency Service.
Seaside resort areas in the North East, South West and East Midlands had the highest concentration of insolvent individuals during 2013, encompassing bankruptcies, Individual Voluntary Arrangements (IVAs) and Debt Relief Orders (DROs).
The North East region once again suffered the UK’s highest levels of bankruptcies, DROs and IVAs in 2013, at 30.6 per 10,000 adults, although this figure has decreased from 33.3 per 10,000 adults in 2012.
London once again had the lowest individual insolvency rate across all regions, at 14.8 per 10,000 adults in 2013.
Stuart Frith, chair of insolvency trade body R3’s personal insolvency committee, said: “The North East, the South West, and seaside towns have been the personal insolvency hotspots in England & Wales for some time.”
“The nature of the labour market in these places explains why personal insolvency is so prevalent: simply, unemployment is much higher than elsewhere or the available jobs are short-term or low-paid.”
“The North East has the highest unemployment rate in England & Wales with the region’s economy still adapting to the decline of the traditional heavy industries. The South West and seaside towns, on the other hand, are still reliant on the tourism sector, an unreliable generator of jobs and growth. This sector is often dependent on good weather and plenty of spare cash in people’s pockets, while jobs are usually low-paid and seasonal.”
The statistics show that total individual insolvency levels fell across England and Wales during 2013.
While the rate of total insolvencies per 10,000 adults in England and Wales rose from 7.2 in 2000 to a peak of 30.9 in 2009, since then the rate has decreased to 22.4 in 2013, down from 24.5 the year previously.
Mark Sands, personal insolvency partner at Baker Tilly, said: “[The] figures provide a more detailed analysis of the downward trend in personal insolvencies last year, but we have seen a small increase in the first quarter of 2014 and this could rise further.
“Despite some mixed messages from the Bank of England, it does look likely that rates will have to rise at some point this year or next, and this is bound to push some hard-pressed borrowers over the edge – particularly those who have become too reliant on rock bottom rates over the last five years.”