UK personal insolvencies are predicted to drop 16% to 25,000 people for the first quarter of this year, according to a leading firm of IPs.
RSM Tenon’s early warning “Tracker” system figures come ahead of tomorrow’s official quarterly statistics from The Insolvency Service.
Mark Sands, head of personal insolvency at RSM Tenon, said: “In the same quarter that the economy grew by 0.3%, personal insolvencies have fallen to their lowest level since early 2008.”
The Tracker statistics show that levels of UK personal bankruptcies, Individual Voluntary Arrangements, and Debt Relief Orders have all decreased year-on-year.
Compared to Q1 2012, bankruptcy cases fell to 6,850 – a drop of 25%, IVAs fell to 10,400 – a drop of 11%, and DROs fell to 7,266 – down 8%, during Q1 2013.
Sands said: “The decline in personal insolvencies in the first quarter of 2013 is expected to be repeated throughout 2013.
“2013 is likely to see personal insolvency levels drop below 100,000 for the first time since 2005.”
Despite the encouraging statistics and forecasts of continued reductions in levels of personal insolvencies, not everyone will feel the benefit.
Sands said: “The picture isn’t as rosy as the figures suggest, for many who have remained in employment even if they have permanent jobs.
“Rising costs, frozen salaries and wage cuts can still have an impact on family finances, especially if they were in debt before the credit crunch.”
With the impending introduction of Universal Credit later this year, more low-income families will find themselves on tighter budgets, as they will be expected to contribute to council tax previously covered by benefit payments.