TEN Scots towns are among the 30 British areas that have seen the biggest improvement for personal insolvencies in signs the economy is recovering.

Hamilton in South Lanarkshire saw the biggest recovery, with insolvency rates decreasing dramatically from 13 in every 10,000 households in the second quarter of 2014, to three in every 10,000 over the same period this year.

Out of 286 areas of Britain that were covered by the study, Falkirk were placed eighth amongst the most improving towns in terms of personal insolvencies, Clydebank was ninth and Glenrothes was 10th.

Also in the top 30 in the study by credit rating firm Experian were Kilmarnock (14th), East Kilbride (15th), Glasgow Parkhead (18th), Perth (23rd), Dumfries (24th) and Kirkcaldy (30th).

Meanwhile the south of England has seen the greatest deterioration in personal insolvencies.

Experian says that their research shows that increasingly, people across the UK are benefitting from improving financial conditions and becoming more financially savvy.

As a result, six in every 10,000 households became insolvent in the second quarter of this year, compared to 10 in every 10,000 households in the same period last year, with Scotland and the north of England faring best.

John McKendrick, a senior lecturer at Glasgow Caledonian University who has studied poverty in Scotland said a "cautious celebration of a positive trend" is in order but warned the trend may go into reverse in the future.

"Maybe it reflects that the initial post-recession adjustments have stabilised … but further rounds of local authority cuts in the coming years might reverse this positive trend," he said. "Similarly, there will be a further squeeze on the poorest households as further welfare cuts bite."

The research showed that at the other end of the scale, England’s southern towns have the highest rate of insolvencies per household. The number of people declaring themselves insolvent grew at the fastest rate in Hatfield in Hertfordshire, even though it should be used as a last resort. The town’s rate increased from six in every 10,000 households in the second quarter of 2014 to eight in every 10,000 households this year.

Half of the 10 worst towns for insolvencies were also located on the coast. Torquay had the highest insolvency rating with 16 in every 10,000 households.

Andy Wills, data director at Experian consumer information services, said: “While it’s encouraging personal insolvency levels are falling overall, there are still pockets of the UK that are feeling the strain.

"It’s these areas where the need for responsible lending is greatest. To manage this, it’s vital that providers have a full picture of their customers’ specific needs, characteristics, and financial situation."

The newly published Accountant in Bankruptcy (AiB) annual report reveals that the total personal insolvencies in Scotland, which include bankruptcies and protected trust deeds, awarded during 2014/15 fell sharply by 19 per cent to 11,167, down from 13,793 in 2013-14.

But despite numbers falling for bankruptcies awarded, funds returned to creditors continue to rise through protected trust deeds and debt payment programmes approved through the Debt Arrangement Scheme.

Some £36.8 million was returned to creditors through the Debt Arrangement Scheme (DAS) with 896 DAS cases concluded, 73 per cent more than during 2013-14. In addition, £27.6 million was paid to creditors upon conclusion of protected trust deed cases.