Is there a debt crisis on the way as Insolvency numbers show an increase in September
New figures from the Insolvency Service’s latest personal insolvency figures have risen by 60% in October 2020 when compared to September in England and Wales.
Personal insolvencies increased to 11,939 in October 2020 compared to September’s figure of 7,458, and were higher than October 2019’s figure of 10,030.
There were, on average, 6,154 IVAs registered in each of the 3 months ending October 2020, 9% lower than the rolling 3-month average observed in the same period ending October 2019. The average number of IVAs registered in each of the last three months ending October 2020 remained lower than the same three-month period last year there were 1,572 DROs and 1,048 bankruptcies (the latter was made up of 970 debtor applications and 78 creditor petitions). There was a 37% reduction in DROs and a 25% reduction in bankruptcies in October 2020, compared with the same month last year. The reduction in bankruptcies was driven by a 17% fall in debtor applications and a 67% reduction in creditor petitions.
Furlough has been extended until the end of March, job losses are mounting, and many people are entering the run-up to the festive season in a precarious financial position. The FCA found that around 12 million people in the UK currently have low financial resilience, where just one adverse life event can be enough to turn ‘just about managing’ into an immediate crisis situation