The Insolvency Service recently published figures revealing that personal insolvencies topped 135,000 in 2010, but Tenon believes this could rise even further as tax rises hit consumers’ pockets in 2011.
Statistics from Tracker, RSM Tenon’s early warning system, show that during the last quarter of 2010 there was a 19 per cent drop in personal insolvencies year-on-year, the largest decrease since RSM Tenon’s Tracker service started in 2007.
The full analysis of personal insolvency information, for age group, gender and race, will be featured in the upcoming issue of Insolvency Today.
Mark Sands, head of bankruptcy and personal insolvency at RSM Tenon, said: “We believe that the headline grabbing figure of a 19 per cent decrease in personal insolvencies year-on-year is a one off and expect that over 2011 the UK will see the highest levels of personal insolvencies on record.
“The first quarter of every year typically sees increased credit card debt and defaults on payments as the impact of overspending at Christmas takes its toll.
“This combined with increasing inflation, gas and oil prices, the rise in VAT, public sector cuts, and interest rates which can only go up, we believe the rest of 2011 and into 2012 will be a struggle for many.”
Sands added that the gap between men and women declaring insolvency has shrunk considerably during 2010, with the number of men applying for any form of personal insolvency decreasing by six per cent, whereas women declaring insolvencies have increased by six per cent.
The Tracker shows that the gender gap is at its lowest in the last three years with women now accounting for 47 per cent of all personal insolvencies.
Sands added: “The 66-plus age group seems to have been hit the hardest in these difficult times.
“Personal insolvencies in this age group show a total increase of 20 per cent in 2010 compared with 2009. In the last quarter of 2010 the 66-plus age group showed the smallest drop in personal insolvencies year on year as well, not showing much in the way of improvement with a six per cent fall compared to 19 per cent over all age groups.”
He added: “Over 2010 the north west saw increases in personal insolvency of six per cent year-on-year, this is by far the largest increase in the regions with it’s neighbour the North East showing a slight increase of one per cent.”