The Insolvency Service has today published insolvency statistics showing that the number of individual insolvencies rose across the board in 2018 and reached their highest annual level for seven years.
This increase was mainly driven by individual voluntary arrangements (IVAs) which rose to a record high of 71,034 in 2018. Of the 115,299 people who became insolvent, 61 percent used an IVA.
The number of debt relief orders also increased to 27,683 in 2018, up 11.2 percent on 2017, while there were 16,582 bankruptcy orders in 2018, an increase of 9.8 percent on 2017.
Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: “It is a worry to see the number of people going insolvent at its highest level for seven years and this reflects the challenging times many people continue to face.
“With this increase driven in large part by a rise in IVAs (Individual Voluntary Arrangements) our concern is that many people in debt are being led down a route that may not be suitable for their circumstances. The prevalence of online adverts that promote ‘solutions’ to debt involving insolvency procedures may well be a contributing factor to this.
“Insolvency options should not be undertaken lightly and it is crucial that people receive free, impartial debt advice before deciding the best course of action to take.
“I would encourage anyone worried about their finances to seek free and impartial debt advice from a charity-run service like National Debtline.”