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Insolvencies hit the squeezed middle 30 March 2011

The report from credit reference agency Experian shows the biggest increase in insolvencies occurred among what it calls the “suburban mindsets,” who are mostly married, middle class and skilled working class people of middle age living with children.

This group, which Experian said makes up 13.6 per cent of the population, can frequently be found working in city centre office jobs or earning good wages on the shop floor of large assembly plants, accounted for 10.34 per cent of personal insolvencies in 2010.

Experian added that this last figure was 45 basis points higher than the corresponding number for 2009.

The credit reference agency used its Mosaic consumer classification of individuals to analyse official data from the Insolvency Service, and discovered how pockets of UK society are being affected by insolvency.

It found that the rate of insolvencies among the poorest groups of fell faster than the national average in 2010.

A demographic labelled as “claimant cultures,” which includes indviduals brought up in families with a history of welfare dependency, represents just 4.52 per cent of the UK adult population, but accounted for 8.1 per cent of insolvencies in 2010.

Members of this group become insolvent at nearly twice the UK average rate but its share of insolvencies also fell by 19 basis points in 2010.

Simon Waller, head of collections at Experian in the UK and Ireland,said: : “While it is encouraging to see a small reduction in personal insolvency levels across the UK, there are certain sections of society that continue to face ongoing difficulties.

“The recession hit different people and communities at different stages and some are finding it harder to shake off its effects.”

The “upper floor living” demographic, consisting of people on limited incomes who rent small flats from local councils or housing associations, saw its share of insolvencies fall by 21 basis points to 5.92 per cent in 2010.

The young, single professionals and middle income earners that constitute the “new homemakers” demographic, had the second highest concentration of insolvencies in 2010. This group, which accounts for 3.99 per cent of UK adults, was responsible for 6.36 per cent of insolvencies, up slightly on 2009 levels.

Experian’s analysis also reveals a significant increase in personal insolvencies across a number of Scottish towns. Glenrothes, Kirkcaldy and Livingston experienced the highest concentration of personal insolvencies across the UK, as rates increased by 20 per cent, 12 per cent and 32 per cent respectively.

More than 80 individuals in every 10,000 households became insolvent in these areas, around twice the average rate of the UK as a whole.

Washington in Tyne and Wear also had a high concentration of personal insolvencies. A total of 77 people in every 10,000 households became insolvent in 2010, although this was down 15 per cent on 2009 levels.

London’s Kensington, Wimbledon, Richmond and Chelsea areas had the lowest concentration of personal insolvencies in 2010. Insolvencies in each area were down significantly on 2009 levels, with less than 20 individuals in every 10,000 households became insolvent.



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