Scots towns take top three places in UK league of personal bankruptcy

THREE Scottish towns have topped a UK-wide personal bankruptcies league, research released today shows.

Glenrothes in Fife has the highest concentration of personal insolvencies in Britain, followed by former prime minister Gordon Brown's constituency of Kirkcaldy. Livingston in West Lothian is in third place.

Personal bankruptcy rates in these towns increased by 20 per cent, 12 per cent and 32 per cent respectively in 2010.

More than 80 individuals in every 10,000 households became insolvent in these areas - around twice the average rate of the UK.

Norma Philpott, chief executive of Citizens' Advice and Rights Fife (CARF) in Glenrothes, said the largest category of personal bankruptcy cases it was dealing with were middle-class commuters affected by job cuts in the financial sector in Edinburgh.

While researchers found that people claiming benefits, those renting council or housing association flats and single people living alone were among those likely to be declared bankrupt, the biggest increase occurred among middle-aged, middle-class and skilled working-class employees.

This group usually work in city centre office jobs and accounted for more than 10 per cent of personal insolvencies in 2010. Experian, the global information company which analysed data from the Insolvency Service, found young single professionals and middle-income earners had the second-highest concentration of insolvencies.

This group, which accounts for almost 4 per cent of UK adults, was responsible for more than 6 per cent of insolvencies - up slightly on 2009 levels.

Ms Philpott said: "Middle-class people across Fife seem to be quite badly affected as the recession continues, and this is one of the main groups we are dealing with.

"Many people in Glenrothes, Kirkcaldy and Dunfermline are commuters to Edinburgh, where they work in the financial sector, which is cutting jobs. They have been able to cash in an insurance policy but after a year the money is used up and they are in financial difficulties.

"Glenrothes itself has also seen quite a lot of industry shutdowns. But because it is largely a non-unionised area the employees don't have such a strong voice to negotiate a good financial deal which could give people a breathing space until they find another job or pay off some debts."

Derek Forsyth, a partner at Campbell Dallas chartered accountants in Paisley, which was ranked tenth in the insolvency league, said: "We're definitely seeing a lot more middle-class people in their 30s and 40s who have developed a lifestyle ahead of their earnings.

"They may have a house which was too expensive but they got a good deal on their mortgage and have been taking two holidays a year on their credit cards."A lot of this would be financed by overtime and bonuses, but now that many workplaces are cutting back, and properties can be difficult to sell, they are suffering financially."

People brought up with a history of welfare dependency represent nearly 5 per cent of the UK population but accounted for 8 per cent of insolvencies last year.

The research also found that while people on limited incomes and renting social housing continue to be among the higher-risk groups, they saw their share of insolvencies fall by 21 basis points to 5.92 per cent in 2010.

Simon Waller, of Experian, said: "The recession hit different people and communities at different stages, and some are finding it harder to shake off its effects."