The latest annual personal insolvency statistics for 2019, recently released by the Insolvency Service, show that even before the financial effects of COVID-19 hit people’s incomes, Yorkshire and the Humber once again saw above-average rates, and Scarborough recorded the highest level of personal insolvencies of any local authority across England and Wales.
Insolvency trade body R3 points out that even prior to the economic impact of the pandemic, many adults in the region were already struggling with Yorkshire and the Humber the third highest for personal insolvencies, rising to 29.5 adults per 10,000 from 28 the previous year. This is above the average level of personal insolvencies across England and Wales which was 26.1 per 10,000 in 2019.
With the total insolvency rate increasing in all regions of England and Wales for the fourth consecutive year, coastal areas nationwide were once again the hardest hit. Scarborough saw the highest concentration of personal insolvencies of any local authority at 50.8 per 10,000, increasing from 47.8 in 2018. In contrast, Westminster enjoyed the lowest insolvency rate with just 8.2 per 10,000 adults.
Hull, which was the fifth highest in 2018 with 44.9 personal insolvencies per 10,000, maintained its position although it saw its rate rise year on year to 49.4 per 10,000.
During 2019, Scarborough experienced 453 new cases of personal insolvency and Hull had 1,000.
Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds, comments: “The latest statistics once again show a picture of winners and losers by region, with nine out of the ten local authorities with the lowest insolvency rates being in London, while eight of the ten highest were in coastal areas. With higher personal insolvency rates a symptom of wider deprivation, it is concerning that a town in our region now has the highest rates of personal insolvencies across the whole of England and Wales.
“The statistics are a stark reminder of the continuing North South divide with the North East, the North West and Yorkshire and the Humber ranked as the three regions with the highest levels of personal insolvency. The endemic hardships being faced across the North once again highlight the need for debt advice services to be targeted and tailored for people living in less affluent areas.
“Unfortunately, the disruption and economic fall-out caused by the pandemic is likely to hit people in these areas the hardest. After decades of industrial decline, employment was already more precarious and with hospitality and retail suffering from the COVID lockdowns, these type of jobs are likely to be in short supply, and we expect to see even more disturbing figures for 2020.”
Ms Temple continues: “Given the current challenges, we believe that the Government should make it a priority to ensure that people in problem debt are aware of their options, and that they can access a suitable form of personal insolvency if that is the best option for them.”
Source: The Insolvency Service/R3