Personal insolvencies rise for the second year running

The number of people who became insolvent jumped by 9.4% in 2017 - the second year running that figures rose.

In total, 99,196 individuals were declared insolvent in England and Wales, up from 90,657 in 2016.

The Insolvency Service said the figures had returned to levels last seen in 2013 and 2014.

The number of people going insolvent has been falling since the financial crisis. However, last year that trend went into reverse.

"The combination of shrinking real wages and the increase in interest rates means that the finances of many Britons are now stretched tight as a drum," said Brian Johnson, insolvency partner at the chartered accountants HW Fisher & Company.

"With the cost of living still rising at 3% a year, the average person's pay packet just isn't keeping up."

The number of Individual Voluntary Arrangements (IVAs) rose to a record level of 59,220 - an increase of nearly 20% on 2016.

IVAs are a way to avoid full-blown bankruptcy. An individual's assets are also protected.

However the Money Advice Trust - which runs National Debtline - said some people were being persuaded to take out IVAs who didn't need them.

"We remain concerned that IVA products are being sold that are unsuitable for people's circumstances - and believe that the lead generation companies that are a big part of this problem should be brought under the Financial Conduct Authority's regulatory regime," said Jane Tully, director of external affairs at the Money Advice Trust.

She advised anyone worried out debt to contact them for free advice.

In Scotland - where the system works differently - there were 2,691 individual insolvencies in the fourth quarter of 2017, a rise of 2.1% on the same quarter in 2016.

In Northern Ireland insolvencies rose by 3.7% over the same period.

Company insolvencies also rose - by 4.2%. In total 17,243 firms in England and Wales went bust in 2017, the Insolvency Service said.

The worst-affected sectors were administration and support services, as well as construction.

The industry body for insolvency and restructuring - known as R3 - said businesses were facing tighter profit margins, with individuals reluctant to pay higher prices.

"Businesses have faced additional headwinds in 2017 with business rate changes, an increase in the National Living Wage, and the final stages of the pensions auto-enrolment roll-out," said Duncan Swift, deputy vice president of R3.

"Our members have reported the construction and retail sectors as being under the most strain. The construction stresses most obviously demonstrated by Carillion in the early part of 2018."