The number of people entering personal insolvency is at its highest level for over five years.
The figures released by the Insolvency Service today reveal that there were 27,388 individuals entering either bankruptcy, a debt relief order or an individual voluntary arrangement, the highest number since Quarter 3 of 2012.
Alec Pillmoor, Personal Insolvency Partner at RSM said:
‘The availability of unsecured credit decreased significantly in the first quarter of 2018 as lenders tightened their credit scoring. Accordingly, some people that were already at their credit limits found that they were unable to take on additional debt, effectively leaving them with little choice but to enter an insolvency process.
‘The increase in personal insolvencies is despite pay rates beginning to rise above inflation, the unemployment rate being at its lowest level for over three decades and the governor of the Bank of England hinting that the previously predicted interest rate rise for the beginning of next month may be delayed.
‘The figures indicate that there are still many households that are having difficulty in paying their monthly bills, possibly due to the post-Christmas hangover or longer term historic debt issues and are now having to enter a formal insolvency process.’