Insolvencies Hit New Half-Century High

The number of people declared insolvent in England and Wales hit a new record high in the third quarter as more indebted Britons were worn down by the UK's longest recession.

A total of 35,242 people became insolvent in the three months to the end of September - the highest number since records began in 1960 - figures from the Insolvency Service show.

The tally is 7% higher than the previous quarter and up 28% on a year ago.

Louise Brittain, an insolvency expert from Deloitte, said the figures showed more people were throwing in the towel after a lengthy battle with debt.

She told Sky News: "They're finally deciding that bankruptcy now is a better way of trying to get out of their financial difficulties.

"I don't think we'll see a drop (in the numbers) at all in the near future and I certainly think incurring debt is one thing, and paying it off takes an awful lot longer."

More encouraging was a sharp easing in the rate of business failures.

The number of company liquidations - in which a firm is wound up and its assets sold off - stood at 4,536 in England and Wales.

The number of personal bankruptcies actually eased by 3% on a quarterly basis, but this was partly down to take-up of the Government's recently introduced Debt Relief Orders.

DROs were launched on April 6 as an alternative to bankruptcy for people with debts of less than £15,000, assets of less than £300 and less than £50 surplus income a month.

The number of people taking them out doubled to 4,505 in the quarter.

Ms Brittain said: "People are getting used to (DROs) and know they're around so it's simply a case of the numbers increasing as people become more aware of them."