Richard said: “The figures released by the Insolvency Service, showing increasing personal insolvencies, support our expectation that the number of Individual Voluntary Arrangements (IVAs) and Trust Deeds is set to grow by 17% or more in 2018.
Our own research shows the financial profile of people using personal insolvency to actively manage their debts has worsened in the last six months, with average monthly income decreasing to £1,899, average monthly contributions towards unsecured debt falling to £145 and average total of unsecured debt remaining between £24,000 – £26,000.
The main drivers of the rise in individual insolvencies continue to be consumer need (fuelled by the current record levels of consumer borrowing), marketing by insolvency providers, and limited capacity in the debt advice sector.
With a likely Bank of England (BoE) interest rate rise on the horizon on 2 August, as well as the prospect of rising inflation and limited wage growth, additional support and advice for people living on low incomes or in financial distress is urgently required. Companies need to be aware of the extra pressures their customers may face, and treat them appropriately when they are struggling to meet payments. We encourage individuals who are in, or feel they’re approaching financial difficulty to speak to their creditors as early as possible, as they can provide support to help manage repayments more effectively.”
