New insolvency figures bring a dose of much-needed good news, with a decrease in the number of individuals going broke. However, within the figures it emerges that while some groups of people seem to be getting back on their feet, others are still struggling.
And it's middle class suburbia that seems to be struggling the most.
New figuresFigures published today by the Insolvency Service bring some good news overall. There were 11.3% fewer personal insolvencies in 2011 compared with 2010.
Experian then looked at the number of people going broke in various different groups. Those on benefits were still the most likely to get into financial trouble. The largest share of UK insolvencies continues to be in the Ex-Council Community group - typically those living on council estates where a large proportion of residents have exercised their right to buy. This group, which makes up 9.26% of the UK adult population, accounted for 14.54% of insolvencies.
SuburbiaHowever, perhaps more surprisingly the researchers also found a big increase in the proportion of those being declared insolvent in suburbia.The 'Suburban Mindsets' demographic, which includes mostly married or middle aged people, bringing up children in family houses, accounted for 10.93% of UK personal insolvencies in 2011, up from 10.37% in 2010.
Why?It's hard to understand why this should be. There is a real possibility that this group had some savings to see them through the tough times, but the tough times lasted longer than the savings, and debts started to build. They have higher outgoings than those without children or in less expensive housing, so small debts can easily build into large ones.
Simon Waller, Head of Customer Management and Collections for Experian UK & Ireland, added: "Redundancy and relationship breakdown are typically the main reason why people experience serious financial difficulties." It may just be that this group were hanging onto their jobs and relationships for as long as possible and have finally reached breaking point.
Doing betterAt the other end of the scale, young professionals were most successful in getting back on top of their debt problems. They saw the biggest decrease in insolvencies, from 6.14% of insolvencies in 2010 to just 5.40% in 2011.
RegionalThe study also revealed how debt problems vary across the country. Among UK towns, Birmingham saw the biggest increase in personal insolvencies, rising by 6%, with 30 in every 10,000 households experiencing insolvency in 2011. Middlesbrough and Stirling also experienced rising levels of personal insolvencies, up by5% and 2% respectively.
Meanwhile, Richmond in South London experienced the UK's biggest drop of insolvencies in 2011 - where just seven people in every 10,000 households became insolvent, 62% less than last year. Overall London remained one of the least affected regions with four in every 10,000 households experiencing insolvency in 2011 compared to five in every 10,000 in 2010.
The towns with the most insolvencies are listed below: