Number of people going financially insolvent predicted to rise

The number of people going financially insolvent is predicted to have jumped to levels not seen for at least six years in official figures released on Tuesday.

The Insolvency Service is due to release figures showing how many bankruptcies, debt relief orders (DROs) and individual voluntary arrangements (IVAs) took place in the fourth quarter of 2018 across England and Wales.

Audit firm RSM expects the figures will show that more than 109,000 insolvency cases took place across the whole of last year.

Alec Pillmoor, a personal insolvency partner at RSM said: “We anticipate that the number of personal insolvencies in 2018 will be in excess of 109,000, which is not only a 10% increase over the previous year, but an annual total not seen for six years.”

Continued low interest rates have been helping to keep borrowers’ costs down, but there have been concerns that some households risk over-stretching their finances.

If RSM’s estimate is correct, the annual total could potentially be at its highest point since 2012, when there were 109,640 cases, or if the total is slightly higher than this and closer to 110,000, it would be the highest since 2011, when there were more than 119,900 cases.

Between 2014 and 2017, the annual personal insolvencies total remained below the 100,000 mark, although the numbers have been creeping up year-on-year since 2016.

In 2017, 99,219 personal insolvencies were recorded.