Is personal debt on the decline?

A recent report by the Insolvency Service showed that levels of personal insolvency are starting to decline.

The Insolvency Service, the government agency responsible for administering the insolvency system in England and Wales, publishes data on the number of people entering into bankruptcies, individual voluntary arrangements and debt relief orders. They make their data publicly available on the official Insolvency Service website. In August last year ClearDebt published an info-graphic of their insolvency data which you can view here: Insolvency Statistics in Motion.

Their latest report indicates that despite a drop in the number of people entering formal insolvency procedures, the figures still remain relatively high.

ClearDebt’s Andrew Smith comments:

I suspect this is temporary – and could be more to do with times being hard – and having been hard for a while.

My view is that a certain amount of personal debt is the inevitable consequence of consumer credit, and we use credit to finance our lifestyles when we feel confident – and that financial shock then hits a number of us. So, when the economy gets going again and we feel good about spending we’ll sew the seeds of debt. 18 months – 2 years later, the personal insolvency figures will rise again.

The insolvency service data also showed how bankruptcy and other formal insolvency procedures such as IVAs (individual voluntary arrangements) affect different groups of people:


Levels of bankruptcy among men and women aged over-65 are the lowest in the UK, however figures are increasing and pensioners are the fastest growing group of bankrupt individuals in the UK. Bankruptcy within this age group has increased six times in a decade and at a 50% faster rate than for other age groups. It’s worth nothing that the average age of a bankrupt individual in the UK is 41, which is close to the average age of the population (39.5yrs).

Men vs Women

Men made up 60% of bankruptcies in 2009 but the proportion of women bankrupts is growing (from 29% in 2000, to 40% in 2009). Among women aged over-65, the rate of bankruptcy has grown even more sharply, over ten times between 2000 and 2009 and in London it is 43 times higher. Women in debt is something we’ve disussed on the ClearDebt blog before, to view some of our opinion pieces on this topic here: Women in Debt.

In the next few weeks we will be publishing some statistics from our client database of people in debt and comparing this to the UK averages. We have already published a comparison of household income which you can view here: Are people in debt the poorest in society already?

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