The number of people going bankrupt across England and Wales reached its highest level in over four years in the second quarter of 2019, official figures show.
Some 4,228 bankruptcies were recorded between April and June – the highest number for any quarter since the last three months of 2014. In all, one in 382 adults in the UK is bankrupt.
Duncan Swift, president of insolvency and restructuring trade body R3, says bankruptcies “tend to be a reasonably good indicator of serious, unsustainable indebtedness”, and “the situation is still serious for the UK’s personal finances”.
Published today - personal insolvency statistics for April to June 2019: total individual insolvencies decreased in Q2 for the 2nd consecutive quarter https://t.co/V28dgff7J9 pic.twitter.com/vXrz5Bx21l— Insolvency Service (@insolvencygovuk) July 30, 2019
His organisation’s latest personal debt snapshot survey - carried out in March - found 40 percent of adults across Britain were fairly worried about their current level of debt, and the same proportion 40 percent said they sometimes or often struggle to make their wages stretch until the next payday.
Commenting on the news, George Charles, spokesperson for www.MoneySavingHeroes.co.uk, suggests going bankrupt is a “scary possibility” looming over many households across England and Wales “regardless of their income”.
“Life is unpredictable, as is the economy currently, meaning that bankruptcy could truly happen to anyone. As Brexit Day edges ever closer, statistics such as these could well continue to rise, exacerbated by potential recession on the horizon and the pound weakening by the day. It’s all looking a bit doom and gloom, so we suggest that Britons approach large purchases with caution – bankruptcy is no joke and is incredibly challenging to come back from,” he says.
Somebody Think of the Children!
The figures also shockingly indicated the number of young people going bankrupt in the UK has increased 10-fold in three years due to rising self-employment and the "temptation" of easily-obtainable credit cards.
Almost 2,000 18-to-25 year olds entered a formal insolvency procedure between April and June in 2019, compared to just 208 at the beginning of 2016, with under-25s now making up 6.5 percent of all personal insolvencies, up from one percent three years ago.
Debt charities have long-raised concerns about the rise in sub-prime credit cards being targeted at people with low credit scores – such facilities can have high annual percentage rates of interest (APRs), typically 30 percent - 70 percent, in comparison to other credit alternatives. Around four million people have such a card in the UK today.