Scotland business

Insolvency numbers fall to lowest level in a decade

Scottish bank notes Image copyright Reuters
Image caption The number of people becoming insolvent is down by more than 15% on the same time last year

The number of Scots becoming insolvent has fallen to its lowest level in a decade.

Official figures from the Accountant in Bankruptcy show nearly 2,600 people became insolvent or signed a protected trust deed in the first three months of this year.

The figure is down by more than 15% on the same time last year.

The number of Scottish companies going bust in the same period rose slightly.

Overall, bankruptcies increased this quarter with 1,735 awarded, which is a 10% increase on the previous quarter.

However, the annual total for 2014/15 was down 5.5% from the previous year and the lowest annual total recorded in seven years.

Business Minister Fergus Ewing welcomed the latest figures.

He said: "These are extremely encouraging numbers which illustrate that Scotland's recovery continues to gather pace.

"We are now looking at levels of sequestrations and companies going to the wall that haven't been seen since before the global recession.

"Nevertheless, this government remains committed to doing all it can to ensure fewer and fewer people experience the misery associated with problem debt."

Financial education

Mr Ewing added: "The introduction of the Bankruptcy and Debt Advice (Scotland) Act earlier this month is a pioneering policy which places Scotland at the cutting edge of global approaches to dealing with personal debt.

"Compulsory financial education for those who have been sequestrated more than once has also been introduced to help the financially vulnerable and prevent them facing future economic difficulties.

"We have also introduced a new route into bankruptcy for those with few assets, ensuring we continue to do all we can to ease the burden of debt on those who can bear it the least."

Tim Cooper, chairman of the insolvency body R3 in Scotland, said the latest results "are a continuation of the steady and prolonged decline in the number of personal insolvencies" in recent years.

He added: "Falling oil prices and food costs, driven down by supermarket wars, should mean personal finances are improving.

"In this period of 'non-flation', and with wages reportedly on the increase, there is an opportunity for individuals to bring their debt under control.

"Indeed with personal insolvency numbers at their lowest in 10 years, it appears many have been using these circumstances to do just that."

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