Personal insolvencies and a ‘two speed’ recovery

What do insolvency rates tell us about the impact of the economic recovery on personal finances?

Figures released by the Insolvency Service show that, whilst individual insolvency rates across England and Wales have fallen substantially since the height of the financial crisis that improvement in personal finances has occurred unevenly across the country.

In this report we look at how the economic recovery has varied across the UK – looking at broader regional trends and local micro factors.

Bankruptcy rates have fallen nationally since 2008, driven by the strong performance of London and parts of the South-East, but the regional variations are almost as revealing as the overall decline in personal bankruptcies.

Although it comes as no real surprise that London and the Home Counties have seen more rapid falls in their insolvency rates than the rest of the country, the size of this north/south divide is stark. The data suggests that, as far as personal finances are concerned, this gulf has grown substantially since the recession.

Outside of London and the Home Counties, significant areas of the country have seen insolvencies rise since the recession, with parts of the North-East, North-West and Wales suffering the biggest increases as they struggle to throw off the effects of the fall in real incomes and job losses. These are areas which, in particular, continue to feel the impact of austerity cuts hitting public sector workers.

Coastal areas, when measured by personal insolvencies, appear to be losing their struggle with eight of the ten areas that have seen the biggest increases in insolvency rates being members of the coastal economy. At this level government initiatives to boost the country’s seaside economy have yet to bear fruit.

Please read our detailed reports:
Personal insolvencies - National overview
Personal insolvencies - Bristol
Personal insolvencies – Home Counties
Personal insolvencies – Medway
Personal insolvencies – London
Personal insolvencies – Southampton

Do not hesitate to contact us with any questions that you may have.