Bankruptcies expected to rise to highest levels since 2014

The number of people going bankrupt across England and Wales is predicted to have jumped to its highest quarterly level since 2014 in official figures released on Tuesday.

The Insolvency Service is due to release personal insolvency figures for the first quarter of 2019.

These are made up of three types of personal insolvency – bankruptcies, debt relief orders (DROs) which are aimed at people with lower levels of debt, and individual voluntary arrangements (IVAs) where money is shared out between creditors.

Audit firm RSM predicts that total personal insolvencies for the quarter will exceed 30,000 cases, including 4,455 bankruptcies, 19,000 IVAs and 6,945 DROs.

If the figure for bankruptcies is correct, it would be the highest quarterly total since the fourth quarter of 2014.

And if RSM’s prediction that more than 30,000 personal insolvency cases were recorded in the first quarter of 2019 is also accurate, it would be the highest total for the first quarter of any year since 2011.

Alec Pillmoor, a personal insolvency partner at RSM, said: “We anticipate personal insolvencies will continue to increase and predict we will see the highest total figures for quarter one for eight years.

“Retail sales figures show sustained growth throughout the first three months of the year, and, despite the number of people in work, and increasingly full-time work, continuing to grow, the renewed confidence amongst consumers in their spending power is likely aided by borrowing and consumer credit.”

Previous figures from the Insolvency Service showed the number of people going financially insolvent across England and Wales jumped to a seven-year high in 2018.

Some 115,299 people went insolvent during 2018 – marking the third year-on-year increase in a row and the highest annual total since 2011 when 119,943 cases were recorded.