New figures from the Insolvency Service show that some 3,539 companies in England and Wales entered insolvency in the third quarter of 2015 – a 4.4% drop on the previous quarter and 10.2% lower than the same period in 2014.
However, the number of individuals being declared insolvent rose for the first time in a year, up 2.8% on the previous quarter to 19,683.
This was almost entirely due to the increasingly common use of Individual Voluntary Arrangements (IVAs), in which an insolvency practitioner helps to arrange a deal between debtors and creditors, generally reducing the chance of a debtor losing the family home and perhaps avoiding the stigma associated with bankruptcy.
The number of traditional personal bankruptcies actually fell to its lowest figure for 25 years at 3,857, and this number is likely to fall even further since new rules introduced this month mean that the minimum amount a creditor must be owed to be able to petition to make a debtor bankrupt has increased from £750 to £5,000.
Meanwhile, separate research by the Government’s Money Advice Service found that four in ten British adults had less than £500 in savings, and that more than one in five adults are unable to read a bank statement – which it described as evidence of ‘stubbornly low financial skills’ in the UK.