According to the Insolvency Service, the number of people declaring insolvency in England and Wales had reached its lowest level in the last 10 years.
The Insolvency Service reported that between April and June of this year, 18,866 individuals declared insolvency ñ a figure that is 29.3% lower than the equivalent from a year ago. It is also the lowest itís ever been since 2005.
The number of companies declaring insolvency is also falling, with 3,908 firms going bust which, making it the lowest level it has been at since 2007.
This news has been interpreted by financial analysts as a reflection of increasing economic strength across the nation and evidence of a genuine increase in wages.
The president of insolvency trade body R3, Phillip Sykes commented on the good news, saying ìit has taken a long time, but with wages outstripping inflation again, people are finding it easier to repay their debts without resorting to insolvency proceduresî.
The Money Advice Trust, the body running National Debtline also welcomed the news about falling insolvency rates but expressed reservations about rising debt levels.
“Many households will be able to accommodate this extra borrowing as the economic recovery continues – but we are concerned that many will turn to credit to plug gaps in their budgetsî said their head of insight and engagement Jane Tully.
Coinciding with this stark reduction in insolvency levels comes the news that levels of mortgages being taken out by individuals purchasing houses has increased rather dramatically.
66,582 new mortgages were taken out this June, compared with 64,826 in the previous month.
While lending to individuals has increased, there is evidence than lending to business actually fell by £5.5 billion this June ñ the sharpest fall seen in the last four years.