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10/07/2014

Seaside towns, North East and South West remain personal insolvency hotspots

  • Six out of top-10 towns with highest personal insolvency rates on the coast
  • Torbay is England & Wales’ local authority with worst personal insolvency rate
  • Insolvency more prevalent for men than women, except for under-35s

Commenting on the regional personal insolvency statistics for England & Wales in 2013 (published today), Stuart Frith, chair of insolvency trade body R3’s Personal Insolvency Committee, says:

“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.”

“It’s interesting to see there is such a difference in insolvency rates between men and women under and over 35 years old. Although middle-aged or older men are slightly more likely to experience insolvency than women the same age, younger women are far more likely to become insolvent than their male counterparts.”

“While it’s welcome that the levels of personal insolvency in England & Wales have continued to fall from their 2009 peak, it’s important to remember that the official statistics don’t capture those people in informal debt management plans. The last R3/ComRes survey of Britain’s personal debt concerns found the equivalent of 2.4m British adults saying they were in one of these. The official statistics do not tell the full personal insolvency story.”

“Unlike formal insolvency procedures, like bankruptcies or debt relief orders, debt management plans are not regulated and may not be provided by people qualified to give expert, impartial financial advice.”

“Unfortunately, it can be difficult for people to access a formal debt solution that is right for their situation. Court fees are a frequent obstacle, while some of the criteria for accessing options like debt relief orders can be too restrictive. This can leave some debtors with little choice but to opt for a debt management plan.”

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see www.r3.org.uk for further information.

  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by recognised professional bodies
     
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.