Last updated at 17:37, Friday, 13 August 2010

The number of people being declared insolvent has fallen in England and Wales for the first time since 2007.

There were 34,743 personal insolvencies in the second quarter of this year, down by 3 per cent from the first quarter.

These were made up of bankruptcies, individual voluntary arrangements and debt relief orders.

The number of firms going into insolvency fell again in England and Wales, down 2 per cent from the previous quarter to 1,311.

These corporate insolvencies - accounted for by receiverships, administrations and company voluntary arrangements - were 14 per cent lower than in the same quarter of 2009.

They now appear to be in a gentle decline as the economy recovers from recession.

Malcolm Shierson at accountants Grant Thornton said: “This is a welcome trend in the number of business failures, but the UK economy is not out of the woods yet.

“We expect to see an increase in business failures in outsourcing, as well as the hotel and leisure services sectors.”

The number of individuals being declared insolvent hit a record high in the first quarter of this year at 35,682.

The quarterly total had been rising sharply since the last quarter of 2007, when the number stood at 23,830.

Brian Johnson at accountants HW Fisher said: “It’s encouraging to see that bankruptcies are down, but don’t be misled by this.

“The fact that both debt relief orders (DROs) and individual voluntary arrangements (IVAs) are still creeping up shows that we are not in the clear yet.

“Many consumers are still highly stretched financially and public sector spending cuts are only going to make things worse over the course of the next two years.”

Paul Crayston, of the Money Advice Trust, said personal insolvency was still running at a level far higher than a decade a ago.

“The number of insolvencies in the first half of the year 2000 was 15,369, whereas the first half of this year saw 70,425 insolvencies - an increase of more than 458 per cent over the last 10 years.”

First published at 15:13, Friday, 13 August 2010
Published by http://www.cumberlandnews.co.uk