What do farmers and executives have in common? Crippling debt

Farmer in the snow

Farmers and executives are rarely united, but at the moment, it seems they are all in it together. New research has revealed that despite a slight drop in the number of people going bankrupt in 2012, there are some groups that bucked the trend and are going bust even faster than a year earlier.

So why are executives and farmers feeling the strain?

The research, from Experian, found that in 2012 the two groups with the fastest-growing levels of personal insolvency were what they call 'rural solitudes' and 'professional rewards'.


The 'rural solitudes' include farmers and those who have retired to the countryside. This group, a high proportion of which are married and living in the South West, saw insolvencies rise from 3.98% of total insolvencies in 2011 to 4.4% in 2012.

Farmers have been under particular strain from bad weather, with the rain destroying crops and silage for dairy herds, and the snow stalling any spring revival. At the same time they have had to contend with disease rampant among cows and sheep, and rocketing feed prices.

Meanwhile, many are on fixed contracts with retailers, so cannot reflect these costs in the sums they charge for their produce. There are only so many times farmers can put off paying their food bill before they succumb.


The 'professional rewards' group, meanwhile, is one of the UK's most affluent sectors. This demographic, which represents company managers and senior executives, typically married with children and living in suburban areas, saw a rise in personal insolvencies, from 5.15% of the total insolvencies across the UK during 2011 to 5.6% in 2012.

This group includes both managers in big businesses and the owners of small and medium-sized business. Business owners in particular have been facing difficult times, as a combination of rising costs and bad debts have pushed many under. The longer that the financial crisis continues, the more businesses will eventually buckle under the weight of debt.

The good news for these groups is that they still represent a tiny proportion of all insolvencies - less than 0.5%.

Most bankrupt

The groups which are most likely to declare themselves insolvent saw their share of insolvencies fall. The most bankrupt group remained the 'ex-council community', representing those typically living on council estates who have exercised their right to buy. However, they saw their share of insolvencies fall from 13.74% to 13.57%.

They are followed by 'suburban mindsets' - usually married and bringing up children in the burbs - who saw their share of bankruptcies fall from 9.07% to 8.9%.

The geographical picture was one of wild variations too. While the total number of individuals being declared insolvent fell across the country, some areas of the UK, particularly Scotland, continued to struggle.

The Scottish town of Clydebank saw the biggest increase in insolvencies last year. Furthermore, the top five towns with the highest concentration of personal insolvencies were in Scotland: Edinburgh, Dundee, Aberdeen, Motherwell, and Glasgow (Parkhead).

Jonathan Westley, Managing Director of Experian's Consumer Information Services UK and Ireland, commented: "While it is encouraging to see that personal insolvency levels are continuing to fall in the UK overall, it is clear that there are still pockets of the UK that are feeling the strain.
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