Figures released by the government have suggested improving solvency rates amongst both individuals and companies for the year 2013, with individual insolvencies reaching their lowest rate since 2005 and company insolvencies at their lowest rate since 2007.
Whilst still higher than they were at points before the fiscal crisis, the figures contribute to the improving picture of the UK economy, with falls of 8% for individuals and 7.3% for companies respectively, when compared to 2012’s insolvency numbers.
In total, some 101,049 individuals were declared insolvent during 2013, whilst 14,982 companies went into liquidation. To put those figures into perspective The Insolvency Service reports that they are representative of 1 in every 166 companies (down from 1 in every 144 in 2012) and 1 in every 445 adults (down from 1 in every 406).
Though the figures were broadly seen as good news, there was some warning that they may mask certain other underlying issues in the economy during 2013 and continuing into 2014.
An absence of the availability of credit, for example, is seen as having a positive effect on insolvencies, but can mean that businesses and individuals struggle in other areas.
Interest rates have also been highlighted as an area of concern in the coming year, with the potential for an increase having the chance to negatively impact the improving insolvency rates.
The Insolvency Service reports on figures on a quarterly basis so all eyes will be on their end of March figures to assess how 2014 is going so far.
