Going bust ‘a growing problem’
Official figures reveal that a record number of people in England and Wales became insolvent in the third quarter of the year (July-September 2006), 55% higher than in the corresponding period during 2005.
The Insolvency Service, a Government body, said that during the period 27,644 people went bankrupt or entered into an Individual Voluntary Arrangement (IVA) with their creditors to manage their debts.
Freelance analyst Colin Perry said that availability of credit was partly to blame for the problem. “It is just too easy to get into massive debt today,” he said. “The credit card companies, for example, have massive advertising budgets and their efforts are pretty successful judging by the number of cards in use.
“But people have to use these products with a measure of self-discipline and, sadly, this seems to be lacking amongst a substantial part of the population.”
Banking group HSBC, which provides many UK current accounts to consumers, also warned that the number of people going insolvent in the UK is a growing problem and was “unlikely to abate in the medium term”.
Despite this, the bank’s performance in the three months to September was better than in 2005, although underlying revenue growth was slower than in the first six months of the year.