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PKF warns personal insolvencies to soar

Rising interest rates are hitting those in debt hard and, combined with summer spending, will set the government's insolvency figures back on an upward trend, David Merrygold, a leading insolvency practitioner with PKF Accountants & business advisers has warned.

Mr Merrygold, a partner with PKF East Anglia, which has offices in Ipswich, Norwich and Great Yarmouth, said: "The Citizens Advice Bureau figures showing a 20% rise in the numbers requesting debt counselling reflects what I see and strengthens my opinion that insolvencies are on the rise again.

"Next to Christmas, the summer period is one of the main pressures people face to spend. Everyone likes a break and those in debt have more reason than most for wanting a distraction from everyday problems. The issue is whether they can afford it or whether any additional spending on top of interest rate hikes just makes their situation worse.

"The government's second quarter insolvency statistics showed a fall in the numbers of people going bankrupt or taking out an IVA but, with the summer season over and no let up from the Bank of England likely, I predict the figures will breach the 30,000 mark for the first time.

"Unfortunately the numbers are likely to continue getting worse rather than better," Mr Merrygold added.

Article by BDO LLP

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