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Personal insolvency falls to 10 year low


Personal insolvency has fallen to a 10 year low in England and Wales, according to figures from the insolvency service.

The number of people being declared insolvent between April and June fell to 18,688, which is 29.3% less than a year ago, and the lowest total number since 2005. The number of firms falling into insolvency has also fallen, with 3,908 firms becoming insolvent over the last three months, the smallest number since the end of 2007.

Industry experts have claimed that the fall in insolvencies is linked to the increasing strength of the economy and the real term increase of wages.
The Money Advice Trust (MAT), which runs National Debtline, welcomed the fall, but warned that people’s debt levels are still rising. Household debt is forecast by the Office for Budget Responsibility to reach 169% of household income by 2020.

Jane Tully, head of insight and engagement at the MAT, said:
"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."

Howard Archer, the chief UK and European economist with IHS Global Insight, said:
"On the face of it, this sharp reduction in bank lending to businesses raises serious question marks about activity and investment."

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