Insolvency Rates Rocket in UK Coastal Areas
LONDON, August 22, 2012 /PRNewswire/ --
- Report reveals beach life is not all sunshine and sandcastles
A personal insolvency crisis sweeping through seaside towns in the UK is revealed in a new report, by ClearDebt.
The new report shows coastal areas in the UK are more likely to suffer from high rates of individual insolvency than anywhere else in the country. Things are not expected to improve in the foreseeable future.
The average insolvency rate for all coastal authorities in 2011 stood at 31.0 per 10,000, nearly 20% more bust Britons than the inland average of 26.0 per 10,000. Only one of the eight communities appearing most frequently in the annual bankruptcy top ten list was inland- Basildon in Essex.
Low wages and high unemployment have pushed coastal communities to the top of the league table for bankruptcy and other forms of individual financial failure. Furthermore, 2011 saw the average benefit claimant rate for a coastal local authority reaching 15.4%, compared to an average for inland authorities of just 12.9%.
In 2011, 6 of the 10 most insolvent authorities were coastal and of these, the majority had unemployment rates significantly above the figure for England and Wales as a whole. A similar pattern is observed for the benefit claimant rate.
Further analysis in the report examines in detail three of 2011's most insolvent coastal communities; Blackpool vs. Southend-on-Sea, Denbighshire vs. Ceredigion and Kingston-upon-Hull vs. Plymouth, comparing them to others that are economically and geographically similar. Revealing a silver lining, that local authority areas can manage to secure lower rates of individual insolvency despite similar geographical conditions.
ClearDebt director of external affairs, Andrew Smith, commented: "Life by the sea should be a dream. In reality coastal areas typically suffer low wages and high levels of unemployment, factors which often impact on debt and lead to personal finance problems that quickly spiral out of control.
"Debt problems for individuals seem particularly difficult in seaside areas that continue to rely on tourism as a major source of income. Our comparison for example of Blackpool and Southend-on-Sea clearly shows that a more diversified local economy leads to higher wages and that is likely to mean fewer debt problems.
"The key to preventing any debt issues from reaching crisis point is to take action sooner rather than later. Economic influences are unlikely to improve significantly in the short term, so there really is no better solution than to find a way to manage and reduce your debt quickly."
You can download the full report here or visit http://www.cleardebt.co.uk/ClearDebt-report-v4.pdf
Sources: Full sources can be found in the report.
You can view the report here http://www.cleardebt.co.uk/seaside-debt
About the data source
Data from 2011 was used because it was the most recent data available at the start of the and it covered a "concluded" time frame of 11 years as opposed to 11 years and 1 quarter. The choice to use 2011 data also allowed for effective year-on-year comparisons within the insolvency statistics. This would have been difficult to carry out effectively operating with yearly and quarterly data at the same time. More infor on data sources can be foun don the last page of the research document.
ClearDebt Group plc was established in 2004 by leading Insolvency Practitioner David Mond. ClearDebt's founding principle is to be a safe place for people in debt to come for free and confidential advice, and debt solutions - guaranteeing a transparent and ethical service at all times. For information log on to http://www.cleardebt.co.uk