Credit, Collections & Insolvency News
The latest official statistics show that personal solvency numbers in Scotland for the whole of 2019 were 13% higher than in 2018, and were at their highest level since 2013.
Meanwhile, the number of personal insolvencies (bankruptcies and protected trust deeds) in Scotland fell by 5% in October-December 2019 compared with July-September 2019, and rose by 3% compared with October-December 2018.
Commenting on the Scottish Insolvency Statistics, October to December 2019, Tim Cooper, Chair of R3 in Scotland, the insolvency and restructuring trade body said “This is the fourth consecutive annual rise in personal insolvency numbers, while 2019 is the first year since 2013 to have seen over 3,000 bankruptcies and protected trust deeds in all four quarters.”
“While the number of people out of work stayed low across 2019, being counted as ‘employed’ in the official figures isn’t by itself a guarantee of either a stable income or a route out of poverty. The recent growth in the number of people counted as unavailable for work may point to a wider malaise. Those in receipt of a fixed income, be it benefits or a pension, are at risk of seeing their income eroded by inflation, and are susceptible to sudden financial ‘shocks’, such as an unexpected bill, which can undo budgeting efforts.”
“The troubles in the retail and leisure sectors indicate that many people just don’t have much left over at the end of the week or the month, and have come to the point where there is nothing else they can cut from their outgoings to try and make ends meet.”
“Rises in the minimum and living wages will have helped many people, raising the base level of income for those in work. Wage growth marginally outstripped inflation for full-time employees last year, giving a sliver of relief, although the deficit of the ‘lost decade’ of wage growth following the global financial crisis is still having an effect.”
“Scots have a reputation for stoicism, which is helpful in many circumstances – but dealing with financial problems is not one of them. Instead, reaching out at the earliest possible opportunity should be encouraged, so that reliable and helpful advice from a reputable, qualified source can be sought. Many people are just one missed paycheque away from a financial downward spiral – for example, a bout of illness for someone on a zero hours contract can be enough to destabilise a precarious budget.”
“The insolvency profession helped thousands of Scots sort out their finances last year, and most practitioners will offer an initial consultation free of charge. The stigma around insolvency is rightly falling, as more and more people recognise it offers a fresh financial start, but there is still further to go.”