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Personal insolvencies across UK rise to highest level in years

The number of people who became insolvent in 2017 rose to the highest level since the aftermath of the financial crisis.

Official figures released by the Insolvency Service revealed that 99,196 people were declared bust last year, a 9.4% rise on the 90,657 in 2016.

As reported by the BBC, the number of personal insolvencies was only marginally less than the peak figures recorded when the economy was in recession.

The Insolvency Service said: “One in 467 adults (0.21% of the adult population) became insolvent in 2017, up from 507 in 2016.”

The figures are made up of three types of personal insolvency – bankruptcies, Individual Voluntary Arrangements and Debt Relief Orders.

The number of Individual Voluntary Arrangements (IVAs) rose to a record level of 59,220 – an increase of nearly 20% on 2016.

IVAs are a financial relief package which help people to avoid full blown bankruptcy, protect their assets and pay off their debts with reduced payments over a number of years.

In Scotland – where the system works differently – there were 2,691 individual insolvencies in the fourth quarter of 2017, a rise of 2.1% on the same quarter in 2016. In Northern Ireland insolvencies rose by 3.7% over the same period.

The new figures reveal the extent of problem debt currently affecting the UK public, with previous reports that Britain’s personal debt mountain increased to a total of £1.6 trillion in 2017.

It was also revealed this week that seven in 10 UK workers are ‘chronically broke’, while a quarter of the UK’s poorest households are getting deeper in debt.

Company insolvencies also rose – by 4.2%. In total 17,243 firms in England and Wales went bust in 2017, the Insolvency Service said.

If you are struggling with debt, Money Advisor may be able to help. Find out how we can help you reduce your repayments and advise on a range of financial repayment options. Contact us today for expert, confidential advice with no obligation.

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