Personal insolvencies are on track to hit 105,000 per annum by 2022, breaking highs last seen six years ago, according to the latest econometric forecast from Arrow Global’s ‘Debt Britain 2018’ research.
Analysis shows that personal insolvencies have been on the increase since 2015 and rising interest rates on the back of the Bank of England base rate rise is fuelling the acceleration says Arrow Global. This is despite a slight dip in 2019 due to the lagged effect of the post-Brexit referendum bank base rate cut and subdued unemployment rate.
From analysis of the Office for Budget Responsibility projections for interest rates, unemployment and consumer debt, Arrow Global also identified that the performance of insolvencies has been worse than that of debt defaults and repossessions in recent years. This development could be to the result of an increased willingness of people to address excessive debt through a formal arrangement with creditors.
Lee Rochford, Group chief executive officer of Arrow Global said “A worrying trend has been identified in our analysis with 105,000 people a year forecast to become personally insolvent by 2022.”
“Insolvency is a devastating situation for anyone to experience. As an industry we are leading the way so that consumers understand how to manage their finances without taking on more debt than they can afford to repay. As a responsible credit management services provider we focus on helping people manage and repay their debt in a sustainable way, and our partnerships with Citizens Advice, Christians Against Poverty, StepChange and Payplan all play a crucial part in educating our customers about debt.”