Personal insolvency figures soar

The number of people who slipped into insolvency between April and June jumped by more than one fifth compared with a year earlier, official figures have shown.

Some 22,503 people went insolvent across England and Wales in the second quarter of 2016, marking a 22 per cent increase compared with the same period in 2015 and a 7 per cent upswing compared with the previous quarter, according to Insolvency Service data.

The latest figures mean that over the past 12 months, one in every 541 adults became insolvent - an increase for the first time in two years, the service warned.

Personal insolvencies are made up of bankruptcies, individual voluntary arrangements (IVAs) and debt relief orders (DROs).

The upswing in the second quarter was driven by a big jump in the number of IVAs, which are agreements where money is shared out between creditors.

Some 12,225 IVAs were recorded in the second quarter, marking an increase of more than two-fifths (42.7%) compared with a year earlier, and 15.4% higher than the previous quarter.

The figures show 6,741 DROs were taken out, marking a 15.6% increase on a year earlier and a 0.3% rise on the previous quarter. DROs are aimed at people with lower levels of debt but no realistic prospect of paying it off.

Meanwhile, there were 3,537 bankruptcies, marking an 11.2% fall on a year earlier and a 5.4% drop off compared with the first three months of 2016.