RSM is predicting that overall personal insolvency levels in the third quarter of this year will remain fairly flat versus the last quarter, but will increase compared to the same period last year.
Ahead of official figures published by the Insolvency Service on 28 October, the data from Tracker, RSM’s online early warning system, suggests that there were around 24,000 personal insolvencies in England and Wales in the third quarter of 2016, an increase of around 14 per cent over the same period last year. These comprise around 4,000 bankruptcies, 13,500 Individual Voluntary Arrangements and 6,500 Debt Relief Orders.
Mark Sands, Personal Insolvency Partner at RSM said:
‘Personal insolvency levels have been on a downward trend for the past six years, so this increase may be a temporary blip. However if, as feared, it reflects continued underlying debt problems with the millions of people struggling to make ends meet month to month, then the expected increases in the costs of living highlighted in the recent increase in inflation, would all suggest that the days of falling personal insolvency levels may be at an end.
‘We see the majority of personal insolvency between the ages of 26 to 55. However we have seen extremes at both ends of the spectrum this quarter - with 18 year olds in Bromley and Bradford entering into formal insolvency procedures highlighting a worrying level of rapid spending on credit and/or finance since turning 18; and two 93 year olds in Bradford and Harrow struggling with debt. If the predicted upward trend continues, these may not just be anomalies and we may see more young people and elderly debtors facing insolvency proceedings in the future.