Total individual insolvencies in Q3 2018 were 10.5 percent lower than in the previous quarter and 2.5 percent lower than in the same quarter the previous year, statistics from the Insolvency Service show.
There were 25,551 individual insolvencies in Q3 2018, 55.8 percent of which were individual voluntary agreements (IVAs), 27.7 percent were debt relief orders and 16.5 percent were bankruptcies.
The number of IVAs in Q3 2018 fell 18 percent to 14,040 compared with a record high in Q2 2018, when there were 17,114. Until this quarter, there had been a general increasing trend in IVA registrations since Q2 2015, while debt relief orders increased for the fifth consecutive quarter.
Duncan Swift, vice president of insolvency and restructuring trade body R3, said: “The sharp drop in personal insolvency numbers is welcome, although it’s worth paying attention to the increases in debt relief orders and bankruptcies. These figures tend to be a better indicator of serious indebtedness than IVAs, which account for the bulk of personal insolvencies.
“A decade of non-existent or sluggish real wage growth has clearly had an impact on people’s finances. Low unemployment levels are a bright spot but are only half the picture when work doesn’t pay enough to cover even the basics. There are signs that more and more people are hitting the limit of what their budgets can stretch to. And although rates of consumer lending growth have slowed, outstanding personal debt is still heading towards record levels.”