RSM predicts continued rise in Bankruptcy numbers

RSM is predicting that official figures, due to be published next Tuesday, will show a 6 per cent rise in quarter one bankruptcy rates in England and Wales compared to both the previous quarter and quarter one in 2018.

This would be the fourth consecutive quarterly rise and the highest quarterly level since the final quarter of 2014. 

The data from Tracker, RSM's award winning early online warning system, predicts that total insolvencies for the quarter will exceed 30,000 cases, comprising a record 4,455 bankruptcies, 19,000 Individual Voluntary Arrangements (IVAs), and 6,945 Debt Relief Orders (DROs).

These figures represent an 11 per cent increase when compared to the first quarter of 2018; a calendar year in which the total annual personal insolvencies were at their highest level for seven years.

Alec Pillmoor, a personal insolvency partner at RSM said:

'Following on from a record breaking 2018, we anticipate personal insolvencies will continue to increase and predict we will see the highest total figures for quarter one for eight years.

'Retail sales figures show sustained growth throughout the first three months of the year, and despite the number of people in work, and increasingly full-time work, continuing to grow, the renewed confidence amongst consumers in their spending power is likely aided by borrowing and consumer credit.

'However the Bank of England notes that default rates increased significantly for unsecured lending throughout the quarter and further, much of this was as a result of credit card borrowing. Therefore, we predict IVAs to remain high this quarter, at around 19,000, and expect this to increase throughout 2019.

‘It is notable that DRO numbers have been in and around the 6,000-7,000 mark per quarter for the last four years. As the mechanism reaches its tenth birthday, we predict numbers will remain consistent at around 7,000 for the first quarter of 2019.’

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