Personal insolvencies have dropped year-on-year but young parents are suffering most, according to information services group Experian.
Statistics from the group found the number of people facing insolvency during the third quarter of this year has decreased by 14 percent compared to the same period last year. This figure is also down 34 percent over a three-year period.
Experian’s research was carried out between July 1 to September 30 across England, Wales, Scotland and Northern Ireland.
The statistics showed that nearly 20,000 people became insolvent in the third quarter of 2016.
Experian said its research found new parents and young, and often, single parents are the people facing most financial hardship.
The group added: “These families have difficulty accessing and managing credit, often relying on high-cost borrowing and unofficial doorstep lenders.”
Its research also found that these families tend to be based in parts of major English cities such as Nottingham, Sheffield, Manchester, Liverpool and in the Teesside area.
Experian said individual voluntary arrangements were the most common insolvency process, making up 38 percent of all insolvencies in the UK.
It added that the rest of insolvencies were near enough evenly split between debt relief orders and bankruptcy in line with a similar trend for the same period last year.
Jonathan Westley, managing director of Experian consumer information service, said: “Our analysis shows that young parents in particular are finding their finances are being stretched to the point they need to file for insolvency.
“It is vital lenders and service providers gain a full understanding of a person’s financial situation so they can make affordable lending decisions for the long term.”