LONDON (Reuters) – The number of people entering insolvency in England and Wales rose sharply in the three months to September compared with a year ago, according to official data that add to questions about the financial resilience of British consumers.
The government’s Insolvency Service said the number of people officially entering financial distress rose to 30,879 in seasonally adjusted terms, up 23% on a year ago though little changed from 30,690 in the second quarter.
The rolling 12-month rate of individual insolvencies per 10,000 people rose to an eight-year high of 27.4, the figures showed.
“Today’s figures provide a worrying insight into the state of personal finances,” said Duncan Swift, president of insolvency and restructuring trade body R3.
Britain has relied on consumer spending to drive the economy this year as businesses, unnerved by the escalating Brexit crisis, have held back on investment.
Individual voluntary arrangements – a form of debt relief short of declaring bankruptcy – accounted for more than half the total insolvencies in the third quarter.
The figures showed the number of underlying corporate insolvencies in England and Wales rose by 1.6% compared with the third quarter of 2018.
Law firm Freshfields Bruckhaus Deringer, which deals with restructuring, highlighted rising financial problems among retailers.
“Normally, you don’t see many retail insolvencies in the run up to Christmas because owners and lenders wait until the seasonal stock is sold in the Christmas and New Year sales and turned into cash,” Freshfields insolvency partner Richard Tett said.
“This shows the depth of the problems on the high street.”
In recent weeks fashion retailer Bonmarche and jeweller Links of London have entered administration.