Where are the shock rises in insolvencies?
Some locations and groups of people are seeing alarming increases in the number of insolvencies - and they're most unexpected.
Groups seeing risesAnalysis from Experian revealed that there were increases in three groups who have previously been insulated from bankruptcy to a large degree. Shockingly, one group to have seen a spike are those with higher incomes and living in more expensive housing. The second group is those living in rural areas, who now make up 3.35% of all bankruptcies. The third group is pensioners who are likely to be receiving an occupational pension, who made up 2.7% of all insolvencies.
Why?Jason Witcome, director of Evolve Financial Planning says that the fact that those in wealthier areas and more expensive housing are struggling does not come as a surprise to him. He says: "Once they have paid the mortgage, made loan repayments and paid the school fees, even those who are on higher incomes can find themselves with relatively little to live on. Rising costs over a few years has pushed more of this group into difficulties."
He adds: "I would expect this group to struggle even more in future. They have been lulled into a false sense of security because of low interest rates and once they start rising, those in larger homes with larger mortgages will be in for a nasty surprise."
Those living in rural areas and on occupational pensions, meanwhile, are more likely to be living on a lower income. Whitcombe says: "Those who have a low cost base have seen the price of food, bills and petrol go up, and their income hasn't risen accordingly. They may not be exceeding their income by much every month, but over time it adds up, and it doesn't take long for savings to be eroded."
These groups are still a long way down the list, as those in ex-council housing are still the biggest group hitting rock bottom. They account for almost 15% of all insolvencies, and the number has risen slightly from this time last year.