Fewer people are becoming insolvent now than at any time since the start of the world financial crisis.
Figures from accountant RSM Tenon show that approximately 25,000 people entered into either bankruptcy or an individual voluntary arrangement in the first three months of 2013, a 16 per cent drop on a year ago. As a result experts at the company are predicting there could be fewer than 100,000 personal insolvencies during the year which will take the number back down to levels last seen in 2005.
The reasons for the drop, according to the group, are the three years of record low interest rates which have helped homeowners who may otherwise have gone bust, and levels of unemployment being kept under control.
But although fewer people are going bust there are large numbers of people and businesses still struggling, warned Mark Sands, the head of personal insolvency at RSM Tenon. "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 have an impact on family finances, especially if they were in debt before the credit crunch."