United Kingdom


  • Service: Advisory
  • Type: Press release
  • Date: 01/02/2013

Personal insolvencies fall by 13% as consumers tighten their belts 

  • But KPMG remains cautious on whether this trend will continue during 2013



The fourth quarter figures for 2012, released by the Insolvency Service today, confirmed that 25,302 people went into Bankruptcy, entered into an Individual Voluntary Arrangement (‘IVA’) or a Debt Relief Order (‘DRO’) between October and December 2012. This was an overall decrease of 13 per cent compared to the same quarter in 2011.    As expected DRO numbers continue an upward trend with a 0.5 per cent increase on the same period last year.


Chris Nutting, Director of Personal Insolvency at KPMG said: “The figures continue to demonstrate a declining trend in personal insolvency, with overall numbers down 13 per cent on the same period last year.  Households are adapting to a maturing culture of more prudent financial management and restricted access to credit but recent economic figures indicate that inflation continues to outstrip wage growth, adding pressures to households which are already stretched financially.  The fear of a triple dip recession will also increase concerns around job security.  Consequently it is possible that we may see increases in personal insolvency numbers during 2013.


“Nevertheless the current figures give a mixed picture in terms of the methods of debt relief available, with bankruptcy numbers showing a significant reduction of 28 per cent and IVAs showing a reduction of 16 per cent in contrast to DROs which have increased slightly by just 0.5 per cent.  As anticipated, the use of DROs as an effective method of debt relief has now overtaken bankruptcy in each of the last two quarters and this trend looks set to continue.


“This demonstrates the changing profile of the market, with those debtors having few assets and relatively low levels of debt choosing DROs, while those with realisable assets (whether physical assets or contributions from income) opting for bankruptcy and IVAs.



“Whilst income levels at best, remain static, the ongoing long term increases in utilities, fuel and food costs could push households into a position where they need to compromise their creditors, as already restricted expenditure is strained further.  This may lead consumers to consider more formal personal insolvency options.”





Media enquiries to:


Sorrelle Cooper, Senior PR manager, KPMG                                        020 7694 8527 / 07932 078218


About KPMG


KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 12,000 partners and staff.  The UK firm recorded a turnover of £1.8 billion in the year ended September 2012. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 156 countries and have 152,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  KPMG International provides no client services.



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