The vulnerable state of household finances was underlined today as the number of personal insolvencies hit its highest level since 2011.
Insolvency Service figures showed 115,299 people became insolvent in England and Wales last year, 20% up on 2017. The rise was driven by a record jump in so-called individual voluntary arrangements, where a debtor agrees to pay a certain amount to a creditor before the debt is scrubbed out.
Despite unemployment close to record lows, the service said one in every 401 adults became insolvent in 2018, up from one in 466 the year before.
The number of companies going under also reached a five-year high in 2018. There were 17,439 company insolvencies last year — the highest since 2013 — driven by a big jump in numbers of builders and retailers collapsing. The number of company voluntary arrangements, used by retailers to chop their rental bills, also jumped 16% to 356, reaching a four-year high.
Stuart Frith, president of insolvency and restructuring trade body R3, said: “The pressure point for businesses most often cited by our members is weak consumer demand. People just don’t have much spare cash at the moment.”
