In the third quarter of this year, there were 28,062 individual insolvencies in England and Wales which represents a 2.5% increase on the previous quarter. Company insolvencies were more positive, showing a decrease of 2.8% since last quarter and 6.6% on the same time last year.
Nick O'Reilly, insolvency partner at the chartered accountants HW Fisher & Company, attributed the jump in personal insolvences since last quarter to "that old chesnut - the Jubilee".
He went on to comment:
"And while it is true that the extra holiday in June will have pushed some insolvencies into Q3, the reality is that the full toll of the double dip recession is yet to be taken. The first wave of serious debtors has washed through the system, but the second wave of people with milder debts is far deeper. While many wage packets have been frozen, and countless households struggle with debt, at least inflation has come down in recent months and interest rates remain low.
"Low interest rates have kept many people afloat. Thankfully, with inflation having fallen, they can stay lower for some time yet. If rates had to be raised, countless more people who are now just hanging on will be tipped into bankruptcy."
Joanna Elson OBE, chief executive of the Money Advice Trust, was wary of the figures, noting:
"“Insolvency figures are not intended to provide a reflection of the financial health of UK households, and so we should be careful not to draw too many conclusions from this data. The hard reality remains that it takes up more and more of our income to put food on the table, travel to work, and heat our homes. This means many households are running a budget deficit of their very own, and some are relying on credit to bridge the gap, as reflected in the sharp increase in unsecured borrowing this September. "
