Personal insolvencies in the UK hit a five-year high during the third quarter of 2017 according to the latest figures released from the government’s Insolvency Service.
The figures showed that 27,807 people in England and Wales registered as insolvent between July and September, up from 22,389 in the three months to June and marking the biggest total since the third quarter of 2012.
The figure was just short of a three-year high struck in the first quarter of 2017, on a seasonally adjusted basis.
Personal insolvencies rose by 11 per cent in the three months to September, according to the figures. Personal insolvencies have been rising over the past couple of years, thought to be largely due to changes in regulation that have made debt relief for consumers easier to obtain.
A recent Reuters poll showed a clear majority of economists expect the Bank of England to raise the base interest rate from 0.25 per cent to 0.5 per cent this week, though most also thought the rise would be a mistake.
Jane Tully, director of external affairs at the Money Advice Trust charity, said: ‘With household debt levels continuing to rise, we are concerned that more families will be pushed into difficulty if circumstances change.’
The increase in personal insolvency was down to a rise in individual voluntary arrangements – a debt relief measure short of bankruptcy.
Business leaders are also worried about the personal insolvency rise.
Bob Pinder, regional director at the Institute of Chartered Accountants in England and Wales (ICAEW), said: ‘Consumer insolvencies increasing at this rate will almost certainly trigger considerable business risk and they must be able to identify the early warning signs fast, and take immediate actions to ensure they are not the ones to become next quarter’s statistics.’
The Bank of England has stated that there is no overall debt bubble in Britain, but it has expressed concern about consumer debt, which had been growing at about 10 per cent a year.