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Downward trend in insolvencies welcome but borrowing set to rise

Money Advice Trust comments on new Q2 insolvency service statistics

The Insolvency Service has today published new insolvency statistics for April to June 2015.

Jane Tully, Head of Insight and Engagement at the Money Advice Trust, the charity that runs National Debtline, said:

“This steady downward trend in insolvencies is welcome news.  We must be mindful, however, of what lies ahead.  Household debt is forecast to pass its pre-recession peak of 169 percent of household incomes in 2020 – and unsecured borrowing is now expected to be £48 billion higher than the Office of Budget Responsibility expected as recently as March.

“Many households will be able to accommodate this extra borrowing as the economic recovery continues – but we are concerned that many will turn to credit to plug gaps in their budgets.  This could include a whole new cohort of households affected by changes to tax credits over the next few years.

“These trends, coupled with the coming rise in interest rates, mean that demand for debt advice is likely to increase in the years ahead.  It is crucial that anyone who is struggling with problem debt seeks free advice from a charity-run service such as National Debtline as early as possible.”

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