Young families most at risk of insolvency, says credit provider
While personal insolvencies have dropped year-on-year, young parents are still most at risk when it comes to financial troubles, a report has revealed.
According to research from Experian, the number of people facing insolvency during the third quarter of this year has decreased by 14 per cent compared to the same period last year. The figure is also down 34 per cent over a three-year period.
But it is young people, often new parents and single parents, who are facing the most financial hardship.
Experian said its research found that these families have difficulty accessing and managing credit, often relying on high-cost borrowing and unofficial doorstep lenders.
It shows that families based in parts of major British cities such as Nottingham, Sheffield, Manchester, Liverpool, and in the Teesside area are most at risk.
The statistics reveal that nearly 20,000 people became insolvent in the third quarter of 2016, with individual voluntary arrangements making up 38 per cent of all insolvencies in the UK.
The remaining 62 per cent of petitions were evenly split between debt relief orders and bankruptcy.
Jonathan Westley, managing director of Experian consumer information service, said: “Our analysis shows that young parents in particular are finding their finances are being stretched to the point they need to file for insolvency.
“It is vital lenders and service providers gain a full understanding of a person’s financial situation so they can make affordable lending decisions for the long term.”