The Live Wire



Press Release

R3 comments on latest insolvency figures

8 August 2011

Personal insolvency increases

"The quarter on quarter increase in personal insolvency is regrettable, yet expected, given job cuts and compulsory redundancies being announced in recent months, in both the public and private sector. Nearly a third of people (30%) do not have any savings at the moment according to R3's latest personal debt snapshot, with many households failing to have a contingency plan for any fall in income or increased outgoings. Therefore, a swift change in circumstance such as losing a job is likely to have pushed many individuals into insolvency.

"The increase in personal insolvencies is likely to continue; we have seen over recent months living costs rise and high inflation effectively reducing 'take home' pay. Added to the fuel hike that will hit families in the winter months, this may be the start of a worrying trend.

"Unfortunately, this data does not capture the figures for those in informal insolvency procedures such as debt management plans (DMPs) so we are unable to get a true measure of how many households are struggling. R3 research revealed more than 2 million people have taken out a 'payday' loan over the last year, while 53% of individuals are concerned about their current levels of debt."

Corporate insolvencies increase for consecutive quarters

"The consecutive quarter increase in corporate insolvency levels is unsurprising given the latest GDP figures revealing marginal growth of just 0.2%. Despite the economy officially being out of recession for some time the early recovery is sluggish and confidence has not returned to UK plc.

"In recent months we have seen many high-profile retail businesses fall into administration, triggered by 'Quarter Day', the traditional time for commercial businesses to pay their next quarter's rent. It revealed that for many retail businesses who hung on through the worst of the recession they simply did not have the funds to meet their rental obligations. This is reflective of many businesses in other sectors; they have depleted their reserves to stay afloat and have no contingency plan for additional costs, unexpected outgoings or a fall in sales."

Frances Coulson, R3 President



Press releases, papers and documents published on this page are the intellectual property of an organisation unrelated to Central Lobby. We promote their parliamentary and political campaigning activities as they are subscribers to the Central Lobby service.

As such, Central Lobby does not edit, endorse, or attempt to balance the opinions expressed on this page. The content of press releases and other such types of content are the responsibility of the originating organisation.

R3 The Insolvency Trade Body

R3 The Insolvency Trade Body

More from Dods

© Dods Parliamentary Communications Ltd