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Record Insolvency Numbers Likely to Grow

Phil Hall
Jul 15, 2007
The Insolvency Service today released figures showing there were 29,804 individual insolvencies in England and Wales in the final quarter of 2006, (a 44.1% increase on the same quarter last year) taking the annual number of insolvencies for 2006 to 107,288 (compared to 67,584 in 2005).

Following the release of these figures, Anne Kiem, Director of External Affairs at the ifs School of Finance, said:

"We continue to see the number of people becoming bankrupt increasing, whether through taking an IVA or a bankruptcy order.

Insolvencies have increased from around 28,000 in 1998 to over 107,000 in 2006 ¿ a period when the economy can be considered to have been relatively buoyant.

These increases are likely to continue, and worse, if there is even a slight downturn in the economy, even greater increases will occur.

A general lack of financial capability among the British population goes a long way to explaining why we are in this predicament. By giving everyone the crucial life skill of being able to manage their own finances the numbers of insolvencies would doubtless decrease.

If policymakers have a real desire to address this problem, bold action is needed in the form of proper financial education for all."

The ifs School of Finance believes this can be achieved if the Government were to:

  1. ensure all schools and colleges offer their students the choice of studying financial education as a stand-alone qualification;
  2. provide ring fenced funding to schools specifically for the purpose of financial education: and
  3. establish financial capability teaching as an integral part of all teacher training.

The ifs School of Finance Finance is the only organisation in the UK offering GCSE, AS and A level equivalent qualifications in personal finance. The University of Manchester recently released a report confirming 95% of students were better able to manage their finances as a result of taking the ifs course.

The most recent insolvency figures can be viewed in full online at the statistics section of the Insolvency Service website.