Almost a third (30%) of people in the North West would be better off if interest rates were to rise by one per cent or more in the next 18 months, according to the insolvency trade body, R3.
A further 38% say they would be unaffected while only 24% predict that they would be worse off. 8% were unsure how they would be affected.
Richard Wolff, North West chair of R3 and Head of Corporate Recovery and Insolvency at JMW Solicitors in Media City, says: “It is encouraging that an interest rate rise is not actually perceived as the bogeyman that would damage our personal finances. However, the impact would be felt differently across the various age groups.
“Low interest rates have had a disproportionate effect on pensioners, many of whom rely on returns on their savings for their income. For these, an interest rate rise would be a welcome relief. The over 65s are the only age group to have seen personal insolvency rates rise in the last five years and an increase in interest rates could help to reverse this trend.
“For everyone with mortgages, credit card bills and overdrafts, an interest rate rise will add that little bit extra to the cost of living. An interest rate rise is least welcome amongst the 35-44 age group who are less likely to have savings and most likely to have mortgages and young families to support.
“Although the majority of North West adults say they wouldn’t be hurt by a rate rise, a sizeable chunk still feel they are set to lose out. With personal insolvencies already on the rise again – even with interest rates at a record low – it is important that policymakers don’t forget about those close to the edge when considering the timing of a rate rise.”
The number of personal insolvencies per 10,000 adults in the over-65 age group has risen from 5.3 in 2009 to 5.8 in 2013; for all adults, the rate has fallen from 30.9 in 2009 to 22.4 in 2013. In 2009 the over-65 age group accounted for 3.5% of all insolvencies, but by 2013 this had risen to 5.7%.
How the data was compiled
ComRes interviewed 2,035 GB adults including 239 from the North West online between 18th and 20th July 2014. Data were weighted to be demographically representative of all British adults aged 18+.