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Personal borrowing skyrockets

27th Jan 17 11:23 am

Why is borrowing on the increase?

Official figures show that the number of people declared insolvent who owed unmanageable debts rose by 13 per cent in 2016. This is compared to the previous year.

The Insolvency Service said, a huge number of 90,930 people in England and Wales found themselves in the situation.

Despite the numbers rising, they do remain lower than the peak level of insolvencies which was hit in 2010.

Mark Sands, personal insolvency partner at consultancy RSM, said: “In 2015 we saw the lowest levels of personal insolvency in over a decade, but the latest figures for 2016 show that the tide has now turned.”

“Despite record low interest rates and high employment levels during the year, many more people found that they could no longer keep on top of their debts.”

“The Bank of England has recently warned of ‘ballooning levels of household debt’ which are being driven by historic low rates. This is increasing the risk that some borrowers will bite off more than they can chew. As a result, we expect to see levels of personal insolvency rise throughout 2017.”

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