Scottish personal insolvencies fall by 9.1%

24th October 2024

Latest data from Accountant in Bankrupcy has showed that personal insolvency levels fell by 9.1% in Scotland during Quarter 2, to a total of 1,891.

The number of personal insolvencies (bankruptcies and protected trust deeds) in Scotland decreased by 8.3% when compared to the previous quarter’s total of 2,063 (April-June 2024).

Iain Fraser, Chair of the Scottish Technical Committee at R3, the UK’s insolvency and restructuring trade body, and a Partner at FRP Advisory, said “Looking at the personal insolvency numbers, both the quarterly and yearly fall has been driven by a reduction in bankruptcies and Protected Trust Deeds. Bankruptcy numbers have dropped to their lowest level since Q4 2021-2022, which suggests that more individuals may be seeking earlier intervention for lower levels of debt.

“While personal insolvency numbers have decreased this quarter, we are not seeing a sustained or consistent decline. Looking at the wider trend over recent quarters, insolvency numbers have fluctuated, with totals reaching 2,101 in Q1 2023-2024 and falling to 1,886 by Q4 of the same year, only to rise again in the following quarter. This suggests that despite the recent drop, there are reasons to remain cautious as economic pressures and financial challenges continue to affect individuals across Scotland.

“We’ve been reading about inflation for a long time, but now people across Scotland are really starting to feel the impact. While wages initially rose to keep pace, the rising cost of everyday essentials and bills is now outpacing income growth. Many people have already cut out spending on things like holidays, meals out, and other small luxuries like subscriptions, but for some, these adjustments still aren’t enough to manage their finances.

“The recent rise in energy prices will also likely be a concern for some individuals across Scotland as we head into the colder months. With heating becoming a necessity, higher energy bills could stretch already tight budgets even further, leaving some households struggling to cover their expenses, and potentially relying on forms of credit to get by.”