29 April, 2015
Following news that personal insolvencies had fallen to their lowest levels since 2005, Peter Tutton, head of policy at StepChange Debt Charity, said:
“The continuing decline in the levels of personal insolvency is welcome news. But with levels of personal borrowing growing rapidly once again, the next government and lenders must ensure that the mistakes of the pre-crisis credit boom are not repeated. Our concern is that growing levels of consumer credit will be followed by growing numbers of people falling into problem debt.
Insolvency not meeting the needs of people in debt
"Insolvency is only meeting the needs of the small segment of the indebted population who have long-term intractable financial difficulties. Last year, we advised over 300,000 people and insolvency was the right course of action for just 20%. The majority of our clients who have suffered a financial shock need time and space to get back on their feet.
“The Treasury’s recent announcement that it would consult on measures to give people in debt “breathing space” by freezing interest and charges when they take action to tackle their debts was a welcome step forward. The next government must commit to completing this review and ensuring that people struggling with debt get the right protections.”