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05/02/2010

Today’s record insolvencies just the tip of debt iceberg as one million struggle without seeking help

The latest insolvency figures, showing record insolvencies in 2009, are just the tip of the personal debt iceberg, according to insolvency trade body R3.
R3’s research released today indicates that an additional one million individuals (916,000) are struggling with debts without seeking help.

As the Government’s latest 2009 statistics shows a 26% increase in personal insolvencies from 2008, R3 President Peter Sargent says, “Even these record personal insolvencies are just the tip of a very worrying personal debt iceberg. What lies below the waterline is a much larger group who are sadly not facing up to their debt problems.”

R3’s research indicates that around one million people are struggling without seeking help, and a further half a million (574,000) have contacted their creditors informally for help after struggling with their debts. All in all, the number of people experiencing financial difficulty is estimated to be around seven times the number of people in formal insolvency.

Commenting on the formal insolvency statistics out today, Peter Sargent said: “We know from previous recessions that early recovery can be a dangerous time – insolvencies continue to rise even after a recession ends. We are predicting 127,191 personal insolvencies in England and Wales for 2010.”


Note to editors: 

  • The total number of people in formal insolvency procedures (281,208) is made up by adding the numbers of people in IVAs, the number of people in DROs and the number of undischarged bankrupts together.

  • New research: In December 2009, insolvency trade body R3 commissioned polling and research agency ComRes to conduct a piece of research aimed at providing estimates for the total numbers of individuals who are in informal arrangements and the numbers of individuals struggling with their debts without seeking help. ComRes surveyed 64,416 members of the public on an online panel between 6 November and 2 December 2009 and extrapolated across the known GB adult population. Data were weighted to be demographically representative of all GB adults. The figures are modelled estimates rather than official figures. ComRes is a member of the British Polling Council www.comres.co.uk .

R3 Press Office

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see www.r3.org.uk for further information.

  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by recognised professional bodies
     
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.