Business

Individual insolvencies are at a six-year high

Individual insolvencies have hit a six-year high, according to the latest official data.

The total number of people going into insolvency continued to rise in the second quarter of 2018, reaching its highest level since the first quarter of 2012.

This represented a 4.4 per cent increase on the previous quarter, nearing a total of 30,000.

The number of people turning to individual voluntary arrangements (IVAs), the personal equivalent of the CVAs used by high-profile companies such as House of Fraser and Prezzo this year, rose sharply by 5.7 per cent in the quarter.

This was the highest number of IVAs on record since it was introduced in 1987.

The Federation for Small Business also expressed concern about the rate of self-employed individuals going bankrupt. Almost 1,000 people defining themselves as self employed were declared bankrupt in the first quarter.

Read more: Time to clamp down on bogus self-employment

“The self-employed community, now 4.8 million-strong, is still denied basic support in too many areas," said FSB chairman Mike Cherry. "Its time for the Government to deliver statutory paternity and adoption allowances for these strivers."

Meanwhile, company insolvencies fell by 12 per cent compared to the first quarter, but the total was 12 per cent higher than the same period last year.

The sector with the highest insolvency rate was construction.

"Where Carillion led, thousands more have followed, commented David Birne of HW Fisher & Company.

“With the attrition rate among builders slowly increasing, the ghosts of the crisis a decade ago are stirring," he added.

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