Commenting on today’s official personal insolvency figures for Q3 2016 which showed the fifth consecutive quarterly increase in individual insolvencies in England and Wales, Mark Sands, personal insolvency partner at RSM commented:
‘The fifth consecutive quarterly increase in personal insolvency levels might suggest that consumers are entering into a new period of problem debt. However, this latest increase, which is being driven by a rise in IVAs, may have more to do with developments in the insolvency market rather than the reality facing borrowers.
‘What today’s figures don’t show is how many people are entering into informal debt management plans. We suspect that as a result of an FCA clampdown on debt management plan providers, many consumers who may previously have been encouraged to enter these informal arrangements may now be being urged to enter formal IVAs.
‘It is certainly true that unsecured debt levels are rising fast, due in large part to the attractive deals on offer at car dealers, but with interest rates cut to a new low in August, the majority of consumers appear to be keeping on top of their debts – at least for now.
‘However, with the current strength of the pound threatening more significant price rises next year, those consumers who find that their wages don’t keep up could begin to find themselves in difficulty.’