Latest quarterly figures from the Insolvency Service for England & Wales have indicated that personal insolvency numbers increased slightly by 1.7% in July 2023 when compared to June.
The personal insolvencies figures totalled 8,268 compared to June’s total of 8,131, and decreased by 10.1% compared to July 2022’s figure of 9,202.
Personal insolvencies decreased by 9.1% from July 2021’s total of 9,092, and also decreased by 32.5% compared to pre-pandemic levels in July 2019 (12,254).
The bankruptcies were made up of 495 debtor applications and 125 creditor petitions. Bankruptcies were 14% higher than in July 2022. Debtor applications were 7% higher and creditor petitions were 49% higher than July 2022. Bankruptcy numbers in the first seven months of 2023 were slightly higher than in the first seven months of 2022, but remained less than half of pre-2020 levels.
There were 2,667 Debt Relief Orders (DROs) in July 2023, which was 45% higher than July 2022. Monthly DRO numbers between April and July 2023 were slightly higher than pre-2020 levels.
There were, on average, 5,659 Individual Voluntary Arrangements (IVAs) registered per month in the three-month period ending July 2023, which is 26% lower than the three-month period ending July 2022.
There were 7,794 Breathing Space registrations in July 2023, which is 28% higher than the number registered in July 2022. 7,660 were Standard breathing space registrations, which is 28% higher than in July 2022, and 134 were Mental Health breathing space registrations, which is 14% higher than the number in July 2022.
Nicky Fisher, President of R3, the UK’s insolvency and restructuring trade body said “The monthly fall in personal insolvencies is mainly due to a reduction in IVA numbers. However, it’s worth noting that Debt Relief Orders are at a five month high, which suggests that the current economic climate is stretching personal finances to the point where professional help is needed.”
“Rising prices are still hitting people in the pocket. Households are looking to save money wherever they can, and consumers are becoming increasingly concerned about the future of the economy and their own financial health.”
“We’re hearing that people are turning to their savings to cover the basics and their bills, while credit lending is rising – and becoming more expensive – as people look to find a way of bridging the gap between their income and their expenses.”
“News that food inflation is easing and energy costs are coming down should be positive for consumers, but whether this reduces the burden on household budgets or simply frees up funds to cover other expenses remains to be seen.”