16 August 2018: The latest personal insolvency statistics released by the Insolvency Service reveal that personal insolvencies rose 4% from Q1 to Q2 in 2018 and are 27% higher than the same quarter in 2017. Personal insolvencies have been on the rise overall since 2015.
Drilling down into the figures further reveals that, whilst women are more likely to enter bankruptcy, with 3,175 women going insolvent in 2017 compared to 2,465 men and insolvencies amongst women rising 18% in the year, the rate of insolvency for young men (under-25s) is rising most quickly, with an increase of 20% from 2016 to 2017.
Increasing student debt levels can be identified as a contributor to a rise in insolvencies amongst young people, with large monthly loan repayments reducing available disposable income and leading to a reliance on consumer credit for basic everyday living expenses. The recent interest rate rise will also impact on those perhaps having to manage their own budget for the first time. The rising cost of housing is likely to be a significant contributor to the pressures on the finances of young people.
Recent data showed that people between 18 and 36 are having to spend a third of their post-tax income on rent, compared with five to ten per cent spent on this by the same age group in the 1960s and 1970s. Those employed in the gig economy receive a variable level of income making budgeting difficult and for salary based roles wage growth has not been a great deal higher than inflation. Maintaining a level of savings is not a reality for a large number of people as a result so, when something goes wrong, there can be immediate and serious consequences.
Financial stability seems to be out of reach for many people but, regardless of age or circumstance, it is important to seek independent advice at an early stage so that the number of possible options is maximised. Please do not hesitate to contact any of the BRI management team for a free initial consultation with no obligation.