The Scottish insolvency statistics for Q2 (July to September 2018), have been released by the Accountant in Bankruptcy – Scotland’s Insolvency Service.
In terms of personal insolvencies, there are not many changes. The figures remain almost static, with 1,150 bankruptcies being awarded in Q2 2018-2019, compared to 1,146 in Q2 2017-2018.
However, when including bankruptcies and protected trust deeds, this figure rose 23% from 2,493 total personal insolvencies in Q2 2017-2018, to 3,067. An increase in protected trust deeds is said to have contributed.
Jamie Hepburn, minister for business, fair work and skills, commented that though the amount of individuals entering insolvency is lower than it was 10 years ago, the issue of unsustainable personal debt should not be taken lightly. It should be priority to ensure that those struggling with debt are offered the correct solutions and the appropriate advice.
Chair of R3 in Scotland, Tim Cooper, said ‘’The recent real-terms growth in wages when measured against inflation has helped ease the pressure on many people’s budget’s, but the growth in wages has hardly been spectacular’’. He states that incomes have not recovered since the global financial crisis, tens of years ago. As cost of living rises, personal financial strains are more likely. However, the unemployment rate is displaying signs that it is bottoming out, that may result in pay rises, which could reduce some pressure on the numbers of insolvency.
Uncertainty lies in the air and people feel finances are out of their control. Consumer debt is high as are fuel prices. Consumer finance is easy to access but future interest rates look to tighten lending. Advice is to seek expert advice, to address the problems sooner rather than later.
On the case of Scottish corporate insolvencies, the amount rose slightly. There was a 3.5% rise, from 224 total corporate insolvencies in Q2 2017-2018, to 232, in the same period this year.
Breaking down the figures, there was 128 compulsory liquidations, 104 creditors voluntary liquidations and no receiverships.
Despite this slight rise, compared to the same time last year, when the statistics are compared to the first quarter of this year, the number of total insolvencies fell by 13.
Tim Cooper said that ‘’the quarter-on-quarter fall in the number of corporate insolvencies is the second decrease in a row in the quarterly figures, but it is still too soon to say whether this fall will be sustained in coming months’’. The fact of their being more total corporate insolvencies than the same quarter last year, implies that difficult trading conditions are being experienced by Scottish Businesses.
Perhaps the decreasing consumer confidence and constrained consumer spending, is to blame for these results. Businesses must prepare for altering scenarios and seek professional advice, to ensure they are geared up for whatever is thrown at them. The precarious times are hard hitting.
With the Scottish Statistics showing a tough time for both individuals and business, what will the England/Wales figures reveal tomorrow???