01 Nov 2019
Official Personal Insolvency Figures Increase by More than 22%
Official figures show that personal insolvency in England and Wales is on track to hit the highest level for nearly a decade.
Data from the Insolvency Service reveals that the number of personal insolvencies increased over a three-month period, reaching 30,879 in September. This is compared to 25,169 for the same period in 2018.
Considering the total number of insolvencies so far this year and the rate at which they are increasing, the final figure for 2019 is set to be the highest the UK has seen since 2010. Alec Pilmoor, personal insolvency partner at RSM said:
“Despite already seeing near decade-long highs over the last 18 months, personal insolvency numbers continue to rise and have exceeded 30,000 for the fourth successive quarter for the first time since 2011, and recorded the highest quarter three total since 2010.”
Rising personal debts and low wages are being blamed for the increase. Duncan Swift, president of insolvency specialist firm R3, said:
“Although real wages have hit a recent high, they are still lower than they were before the financial crisis. Unemployment may be low but it’s not necessarily secure for everyone.”
There’s also been a notable increase in the number of corporate insolvencies, thought to be fuelled by a spate of bankruptcies in the construction industry. The Insolvency Service has said that this is “the highest underlying level of company insolvencies in any quarter since the first quarter of 2014”.
However, it’s reported that these trends in company insolvency figures may have been influenced by ‘bulk insolvencies’. These arose as a result of HMRC crackdowns on taxes paid by one-person corporations.
The amount of companies going into administration increased by 20% in one quarter. According to Mr Swift, the uncertainty surrounding Brexit is having a profound effect:
“Uncertainty and stop-start stockpiling are among the factors hitting recruitment, investment, and wider business health, and we’re seeing more businesses worrying about their cashflow levels and their order books over the next quarter and the next year.”