Accountant in Bankruptcy (AiB) released its latest official statistics reporting personal insolvencies in Scotland for the first quarter (Q1) of 2018-19 and final statistics for the 2017-18 financial year.

The results show that there were 3,208 personal insolvencies (bankruptcies and protected trust deeds (PTDs)) in Scotland in 2018-19 Q1, compared with 2,869 in 2017-18 Q1, an increase of 12%.

Commenting on the latest figures, Accountant in Bankruptcy Chief Executive Richard Dennis said “While the number of individuals entering insolvency continues to be very much lower than 10 years ago, these figures clearly illustrate personal insolvencies remain on an upward trend from the first quarter of 2015-16. With consumer borrowing now surpassing the levels seen before the 2008 crash, we are leading an ambitious programme of reform to make sure the debt solutions offered by the Scottish Government remain relevant in today’s society.”

“In particular, changes expected to come into force this October will make the Debt Arrangement Scheme a much more accessible and flexible option for some people who otherwise may see no alternative other than insolvency.”

Tim Cooper of R3 in Scotland, the insolvency and restructuring trade body said “Scottish personal insolvency numbers have been fairly unpredictable from quarter to quarter – this is the fourth time in a row that a quarter-on-quarter rise has followed a quarter-on-quarter fall. The underlying trend line for the past two years, however, shows a rise in the number of personal insolvencies, and this latest set of figures continues this pattern.”

“During the second quarter, there were rises in the cost of petrol and diesel, which will have eaten away at people’s budgets. Inflation across the UK was lower than at the start of the year, but consumers are still adjusting to the price rises experienced over the latter half of 2017.

“The impact of the new, higher rates of the National Minimum and Living Wages introduced in April will have helped many people to bear higher costs for essentials like food and fuel, although these latest personal insolvency numbers suggest that for many, it may not have been enough, especially following a long period when wage growth was outstripped by inflation.”

“This increase in personal insolvency comes during a period of low unemployment in Scotland. The latest figures show a small rise in the number of people seeking work in Scotland, driven by more women looking for jobs. Overall, the headline unemployment rate of 4.3% is roughly in line with the 4.2% seen across the UK as a whole.”

“R3’s most recent personal debt research suggests that a third of Scottish adults (33%) often or sometimes struggle to payday, so money worries are not confined to a small number of people. As always, talking through any worries with a qualified and trustworthy advisor can be a real relief – we want to get the message across that help is out there, and taking that first step to speak to someone can be scary but is ultimately a good idea.”

Final statistics show that in 2017-18 personal insolvencies in Scotland increased by 5.7% to 10,602 from 10,032 in 2016-17. Personal insolvencies rose for the second consecutive year but remain below levels seen between 2005-06 and 2014-15. The increase in personal insolvencies in 2017-18 was mainly due to PTDs, which increased by 8.9% on the previous year to 5,958. Bankruptcies increased by 1.8% to 4,644.

In 2017-18, there were 2,318 debt payment programmes (DPPs) approved under the Debt Arrangement Scheme (DAS), 85 more than a year earlier. In 2017-18, £37.6 million was repaid from debtors under DAS compared with £37.3 million in 2016-17.