Economy

Number of personal insolvencies continue to rise

The number of people entering personal insolvency rose by 7.2% year-on-year for the second quarter, the highest for the period since 2010.

The figures, released by the Insolvency Service, show that there were 30,936 individuals entering either bankruptcy, a debt relief order or an individual voluntary arrangement (IVA) in the period between April to June.

The most common of these was IVA, with 19.956 people entering the agreement, followed by 6,752 people filing for a debt relief order and 4,228 entering bankruptcy.

The statistics also show that 1 in 382 adults entered a personal insolvency procedure in the 12 months to the end of Q2, a higher ratio than the 1 in 388 adults in the 12 months to the end of Q1.

Alec Pillmoor, personal insolvency partner, RSM, said: “As we predicted, following the near decade long highs of 2018 and Q1 of 2019, personal insolvency numbers remain high and remain comparable to the first quarter of 2019, resulting in an increase in the rolling 12-month insolvency rate.

“With near full employment and low interest rates, you would expect personal insolvency rates to fall, but in fact, insolvency levels have risen by 7.2 per cent when compared with the same quarter last year. This suggests that many people continue to be over-optimistic when it comes to estimating their ability to meet repayment demands as they fall due.”

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