Personal insolvencies set to rise by as much as 30% in 2017
Non-traditional lenders experiencing the greatest volume growth
Analysis from The Insolvency Exchange, part of TDX Group, the UK’s leading provider of data and technology-driven debt solutions, reveals that volumes of personal insolvency in the UK are likely to see a significant spike in 2017.
The company’s latest Insolvency Market Trends data highlights that new Individual Voluntary Arrangement (IVA) and Trust Deed (TD) applications continue to rise and volumes could increase by as much as 30% by the end of the year1.
Richard Haymes, Head of Financial Difficulties at TDX Group, said: "When we look at the number of IVAs and Trust Deeds recorded, the year-on-year figures are quite startling. We saw a 45% increase in January 2017 versus the same month in 2016 and an increase of almost 20% in February 2017 against 2016 levels.
"We’re still early in the year, but current trends show that volumes are likely to rise significantly, with IVA and Trust Deed numbers reaching over 70,000 in total. Inflation is a significant contributory factor to this increase, particularly as household bills, such as utilities and groceries, continue to rise, and will tip some of those ‘at risk’ into financial difficulty. For people who are already struggling with lower incomes, this will make their ability to keep on top of existing debts even harder.
"Creditors should note that we are seeing a significant change in the types of debts included in IVAs. Retail banks are seeing only limited growth in new IVAs with general annualised growth at c10%. However, near and sub prime creditors like credit card, catalogue and high cost creditors are seeing growth as high as 70%. This reflects post credit crunch lending patterns.
"As volumes continue to rise and new types of consumers begin accessing personal insolvency solutions for the first time, creditors need to work hard to understand the extra pressures on their customers and effectively support them through this difficult situation by offering constructive, and rehabilitating, solutions."
TDX Group data is corroborated by recent figures released by Stepchange debt charity2 showing that record numbers of individuals are seeking debt advice and personal debt levels have risen for the first time in eight years, with average unsecured debt increasing from £13,900 to £14,251. Whilst statistics from the UK Insolvency Service3 at the end of 2016, highlighted a 23.2% increase in the number of IVAs in England and Wales during 2016 and predicated that this trend could accelerate and become more serious in 2017.
To view the full analysis, please visit: Insolvency Market Trends
For further information please contact:
Cara Somerville on 07826 946 555 or firstname.lastname@example.org
Notes to Editors:
1. Figures based on TDX Group data from The Insolvency Exchange up to February 2017
About TDX Group: TDX Group, an Equifax company, provides businesses with technology, data and advisory services to improve debt liquidation and the fair treatment of consumers in financial arrears. TDX Group works at the centre of the industry with specialist debt businesses and with creditors across financial services, retail, energy, water, telco and media sectors, plus local and central government; providing solutions which support them in managing collections, recoveries, debt sale and insolvency. To find out more about TDX Group please visit: www.tdxgroup.com. TDX Group is authorised and regulated by the Financial Conduct Authority.
About Equifax: Equifax is a global information solutions company that uses trusted unique data, innovative analytics, technology and industry expertise to power organizations and individuals around the world by transforming knowledge into insights that help make more informed business and personal decisions. The company organizes, assimilates and analyzes data on more than 820 million consumers and more than 91 million businesses worldwide, and its database includes employee data contributed from more than 7,100 employers. Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor's (S&P) 500® Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 9,500 employees worldwide. Some noteworthy achievements for the company include: Named to the Top 100 American Banker FinTech Forward list (2015-2016); named a Top Technology Provider on the FinTech 100 list (2004-2016); named an InformationWeek Elite 100 Winner (2014-2015); named a Top Workplace by Atlanta Journal Constitution (2013-2016); named one of Fortune’s World’s Most Admired Companies (2011-2015); named one of Forbes’ World’s 100 Most Innovative Companies (2015-2016). For more information, visit www.equifax.com. Equifax Limited is one of the Equifax group companies based in the UK. Equifax Limited is authorised and regulated by the Financial Conduct Authority.Download PDF