Personal insolvencies spike to reach a seven-year high
The number of personal insolvencies surged in 2018 to hit a seven-year high, official figures published on Tuesday showed.
According to the government’s Insolvency Service, total insolvencies increased for the third year running to reach 115,299 in 2018, a 16.2% year-on-year rise and the highest since 2011.
The increase was driven by individual voluntary arrangements, which are formal agreements that allow people to avoid bankruptcy while paying back debts over a period of years. They rose 19.9% top 71,034.
The Insolvency Service said that one in 401 adults became insolvent in England and Wales in 2018, compared to one in 466 in 2017.
The underlying number of company insolvencies was 16,090, the highest level since 2014, with all types of insolvency on the increase. The only exception was the number of companies going into administrative receivership.
The construction sector had the highest number of insolvencies.
In the last quarter of 2018, however, the underlying number of company insolvencies was down on the previous quarter at 3,949, an 8.6% decrease.
Stuart Frith, president of insolvency trade body R3, said: "The pressure point for businesses most cited by our members is weak consumer demand. People just don't have much spare cash at the moment.
"Although recent government figures showed that the weekly amount spent by households has hit its highest level since 2005, much of that expenditure went on housing and transport, which less left over for consumer outlay. This is having a big impact on consumer-facing businesses."