PERSONAL insolvencies rose to a seven-year high last year, figures show.
The number of people in England and Wales who went insolvent reached 115,299, the third annual increase and the highest total since 119,943 in 2011, according to the Insolvency Service.
These include bankruptcies, which are often seen as a last resort; debt relief orders (DRO), which are aimed at people with lower debts but no prospect of paying them off; and individual voluntary arrangements (IVA), where money is shared out between creditors.
Of the people who went insolvent last year, 61.6 per cent used an IVA, 24 per cent used a DRO and 14.4 per cent entered bankruptcy. There was also a spike just before Christmas.
Meanwhile, the underlying number of companies going bust rose to 16,090 last year — the highest level since 2014. Stuart Frith (pictured), president of insolvency and restructuring trade body R3, said ‘many people have run out of road’ as banks have tightened credit standards and ‘helicopter money’, such as PPI refunds, has dried up.
‘People are having to spend more of their income on housing and transportation, leaving less left over for savings and making budgets more vulnerable to shocks,’ he added.
Mr Frith said the most common reason given for corporate insolvency was ‘weak consumer demand’ with less spare cash in circulation.
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