The government’s latest insolvency statistics show that the Isle of Wight was in the top 5 local authorities for the highest rates of personal insolvency – a combination of bankruptcies, individual voluntary arrangements and debt relief orders – in 2016 and that such insolvencies are most common in coastal towns, says insolvency and restructuring trade body R3.
The statistics show that the Island has the fourth highest overall rate of personal insolvency in England and Wales with a little over 38 in every 10,000 adults entering some form of formal insolvency procedure, an increase of approximately 17.5% on the previous year. During 2016, 438 people on the Island entered a formal procedure, which equates to roughly 1 in every 262 adults.
Mike Pavitt, chairman of the Southern Committee of R3 and corporate restructuring and insolvency partner at Paris Smith LLP solicitors, Southampton comments:
“The latest regional personal insolvency statistics follow a very established pattern: insolvency rates are typically highest on the coast, where towns often have lower than average wages and higher levels of unemployment. The relative dominance of the tourism industry in those areas means available jobs are often lower paid, part-time, and/or seasonal. This makes personal finances more vulnerable to short-term shocks and to disparity between price inflation and wage increases.
“Looking for the positives for the Island, however, we can see that the statistics for the Island in 2016 were swelled by an exceptionally high number of debt relief orders (DROs), for which the Island has the third highest rate in the country. When we drill down into the supporting data, we see that DROs make up more than 50 per cent of all personal insolvencies on the Island, and that the Island does not in fact make the top 10 for either bankruptcies or IVAs. This suggests that whilst the numbers for the Island are still objectively high, the amount each individual debtor owes when they become insolvent is significantly less than the national average and/or that the value of the average Island debtor’s assets is lower. It may also mean that people on the Island are simply better aware of the availability of DROs than debtors in other parts of the country.”
| Local Authority | Insolvencies per 10,000 adults |
| Torbay | 43.0 |
| Stoke-on-Trent | 42.5 |
| Scarborough | 38.2 |
| Isle of Wight | 38.2 |
| Great Yarmouth | 38.1 |
| Corby | 36.1 |
| Kingston upon Hull, City of | 35.8 |
| Plymouth | 35.0 |
| Ipswich | 34.8 |
| Blackpool | 34.6 |
