Personal insolvencies increase by 5%

Latest quarterly figures from the Insolvency Service for England & Wales have indicated that personal insolvency numbers increase by 5% in May 2023 when compared with May 2022.

The personal insolvency figures also increased by 10.7% in May 2023 to a total of 9,962 compared to April’s total of 9,002, and decreased by 5.1% compared to May 2022’s figure of 10,499.

The figures showed that there were 617 bankruptcies registered. The bankruptcies were made up of 521 debtor applications and 96 creditor petitions. Bankruptcies were 5% higher than in May 2022. Debtor applications were 5% higher but creditor petitions were 3% higher than May 2022.

There were also 2,505 Debt Relief Orders (DROs) in May 2023, which was 23% higher than May 2022. Monthly DRO numbers may be volatile at present due to the introduction of new DRO hubs.

Whilst there was 6,767 Individual Voluntary Arrangements (IVAs) registered per month in the three-month period ending May 2023, which is 14% lower than the three-month period ending May 2022.

Breathing Space registrations were 16% higher than the number registered in May 2022. 6,609 were Standard breathing space registrations, which is 17% higher than in May 2022, and 74 were Mental Health breathing space registrations, which is 33% lower than the number in May 2022.

Commenting on the figures Nicky Fisher, President of R3, the UK’s insolvency and restructuring trade body said “Turning to personal insolvencies, the monthly increase we’ve seen in the figures published today is driven mainly by a rise in the number of people entering an Individual Voluntary Arrangement and a Bankruptcy.”

“This monthly increase is likely to be the result of last month’s backlog of cases being resolved, but does also show the effect the cost of living is having on people’s finances and their ability to remain solvent.”

“Money worries are still a key concern for many people. Food and energy costs are the largest concerns, and people are avoiding spending on anything other than the essentials as they focus on paying their bills.”

“While consumer confidence has improved, both in the short-term and compared to last year, people are still worried about the economy and their finances, and reluctant to make any major purchases.”

“Over the summer, inflation and interest rates could cause problems for people looking to take out or renew mortgages and may be the pinch point for those who are just about managing right now.”