Personal insolvencies drop, but bankruptcies peak in seaside towns 

The Insolvency Service said this was mainly driven by a fall in IVAs, which fell around 16 percent compared to the first quarter – which had the largest quarterly number of IVAs since records began.

Bankruptcies during the second quarter increased nearly five percent compared to the same period last year. The Insolvency Service attributed this to changes in the application process.

In Scotland, personal insolvencies including bankruptcies and protected trust deeds, increased by 17 percent for the first quarter, year-on-year.

The number of individual insolvencies may have dropped in the last few months, but the level of bankruptcies remains to be a problem in seaside towns.

Seven of the top 10 areas for personal insolvencies were in seaside towns in 2016, according to accountancy firm Moore Stephens.

The firm said these towns see the highest rates of bankruptcy, partly driven by the decline of seaside tourism.

Moore Stephens found Torquay had the highest levels of personal bankruptcies, with 43 insolvencies per 10,000 population – more than double the national average of 19.7 per 10,000 population.

Other high insolvency coastal areas include Scarborough, Hull, Plymouth and Blackpool.

The accountancy firm explained that tourist areas such as Torquay and Blackpool often struggle with high levels of insolvency as they lack the economic diversity of larger cities, and are still too reliant on low-spending domestic tourists for employment.

However, larger coastal towns such as Brighton and Bournemouth are bucking this trend. Insolvency levels for these towns are respectively 17 and 18.4 per 10,000 population – below the national average.

Jeremy Willmont, head of restructuring and insolvency at Moore Stephens, said: “Bankruptcy in the more run-down of the British seaside towns has become an epidemic.”

“As seaside tourism declines, there is less chance for these areas to reinvent their image as exciting, vibrant places for business to thrive. High levels of debt show the underlying fragility of those economies and the low levels of accumulated wealth in these towns.”

“As the fishing industry and other traditional coastal trade have declined, people in seaside towns are continuing to fall into debt as the local economy in these areas fail to keep up with the rest of the UK.”