Latest figures released today show that the number of people declaring themselves insolvent in England and Wales fell in the first three months of the year, however experts predict a rise in debt management problems later in the year.

The figures released by the Insolvency Service revealed that during the first three months of the year there were 30,162 personal insolvencies, a drop of 1.7% on the previous quarter and down 15.5% from the same period a year earlier.

The latest Insolvency Service figures mark the fourth consecutive quarterly fall, however the number of businesses becoming insolvent has risen and experts predict an increase in debt problems – with personal insolvencies expected to rise later in the year.

Despite 2010 seeing a record number of people being declared insolvent, the numbers were falling as the year progressed.

People’s debt management habits appear to have changed slightly too, with some debt solutions experiencing drops whilst others saw rises.

The number of bankruptcies and Individual Voluntary Arrangements fell (by 31.3% and 8% respectively) on the same period the previous year, whilst the insolvency for people with low debt levels (the Debt Relief Order) was up 20.3% from the year before.

Steven Law, president of the insolvency professional body R3, welcomed the drop in personal insolvency numbers, saying:

“Our research shows that, against the backdrop of increased living costs and falling income, four in five consumers have changed how they shop in a bid to save money. A further drop in personal insolvency may signal that the reining in of domestic belts is starting to pay off.

“However, this data only captures those that are in formal insolvency procedures so we are unable to gauge how many households are struggling.”

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