UK personal insolvencies will jump to at least 120,000 this year

14th January 2008

The total number of personal insolvencies will jump to at least 120,000 this year, almost triple the equivalent figure in 2004, when just under 47,000 people went bankrupt - reports accountancy firm Grant Thornton.

It revealed that more than nine million people in Britain are now struggling to pay credit card bills and mortgages, with the average owed by problem debtors hitting £30,000.

Mike Gerrard, head of Grant Thornton’s personal insolvency practice, said: “Sadly, many individuals spend up on credit at Christmas and pay no heed to the financial warning bells. Come January, they find themselves in a situation where previous financial woes are compounded by the bills arriving from the festive season and in these situations insolvency becomes the only way out.”

In addition, as fixed rate mortgage deals come to an end an estimated 1.4 million people will have to pay more for their home loans - costing them an extra £150 to £250 a month.

They say, “The homeowner has to act quickly, rather than close their eyes and hope the problem goes away”.