Just one person was made bankrupt in the City of London in 2014, compared to 101 in Blackpool, according to figures from the Insolvency Service which reveal a deep north-south divide in debt problems.
The total number of personal bankruptcies in England and Wales peaked during the financial crisis in 2009, but has fallen dramatically and now stands at the lowest level for 15 years.
Part of the reason is that individuals are opting for other forms of insolvency – such as individual voluntary arrangements [IVAs] and debt relief orders [DROs]. These have fallen from the peak seen in 2009, but are still nearly three times the rate in 2000.
Down-at-heel seaside towns and former industrial areas head the list of insolvency rates, with London postcodes enjoying the fewest financial problems.
Sean Griffiths, manager at Adcroft Hilton, said small hoteliers are among their most frequent customers. “A lot of the bankruptcies we deal with are individually-run hotels and B&Bs. As you drive round Blackpool you can see a lot of B&Bs that are closed up, even though it’s the middle of the summer season. People used to come here on holiday, but now all you get is day-trippers and hen and stag dos.”
Blackpool council said 2014 was a good year for the town’s tourist trade, but acknowledged the deep financial problems faced by many residents.
“We are one of the most economically deprived areas in the UK so perhaps it’s not that surprising we have a high level of personal insolvencies. Studies have also shown that Blackpool has been among the towns hardest hit by government cuts.”
Rhyl in north Wales, another seaside resort popular with visitors from Liverpool and Manchester also features among the worst for personal insolvencies. But the list of debt black spots also includes Eastbourne and Torbay, both usually considered to be relatively prosperous.
Nationally, debt advisers are warning that interest rate rises and the loss of tax credits is likely to see the downward trend in insolvencies since 2009 go into reverse.
The full article from the Guardian can be seen here: