IVA Numbers Up 20% to Highest Levels on Record

January 29, 2019

There were 71,034 people in England and Wales who entered Individual Voluntary Arrangements (IVAs) as a form of personal debt solution last year.

The figure represents an increase of slightly less than 20 per cent on 2017 and is the highest annual level yet recorded, according to official data from the Insolvency Service.

IVAs were found to be the most common form of insolvency procedure entered into by people with serious debt problems during 2018, with the arrangements accounting for 61.6 per cent of all instances of personal insolvency across the year.

Meanwhile, there were 16,582 bankruptcy orders issued last year, which represents an increase of 9.8 per cent compared with the previous 12 months.

 

Debt relief order (DRO) numbers also increased across England and Wales as a whole, with 27,683 issued during 2018, which is an 11.2 per cent increase on 2017.

A total of 115,299 people in England and Wales became insolvent in some way last year, which is the highest figure for any full year since 2011.

The latest statistics suggest that one in every 401 adults across the England and Wales became insolvent in 2018, which is a change from one in every 466 people in the year before.

“Personal insolvency numbers have been rising steadily every year since 2015, and 2018 was no exception,” commented Stuart Frith, president of the UK’s insolvency and restructuring trade body R3.

“As banks and other lenders have tightened their credit standards in response to the Bank of England’s concerns around consumer over-indebtedness, many people have run out of road,” he said.

Mr Frith went on to note that personal insolvency numbers are rising despite historically low levels of unemployment being recorded across the UK.

He suggested that the issue for a lot of people is that although they’re in employment their hours of work are unpredictable and their wages are being kept low, which means they remain vulnerable to experiencing serious problems with personal debt.

Feeling the financial strain despite being in work is a situation that many millions of people now find themselves in across Britain and that is contributing significantly to rising demand for IVAs, according to Mr Frith.

Joanne Wright

Head Adviser at our Manchester Office

Tel: 0800 001 4247
Email: enquiries@ukdebt.org.uk

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