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Personal Insolvencies Rise, Pressure Increased on Firms

The number of personal insolvencies in England and Wales has hit a six-year high as consumers are squeezed by high inflation, modest wage rises and growing levels of debt.

 

Personal finances have been tormented by sluggish wage growth and a persistently uncertain political landscape. Household budgets have been squeezed and consumers have had to reign in their spending as a result. This penny-pinching sentiment has gripped the high street, with stunted spending behaviour leading to expansive low profits. In spite of efforts, consumers have not avoided financial distress and personal insolvencies have reportedly skyrocketed.

According to new data released by The Insolvency Service, a government agency, there were 28,951 people declared insolvent in the past three months. This is a jump of 27 per cent over the same period last year and up 4.4 per cent in the first quarter of this year. These figures illustrate the complexities involved in navigating Britain’s financial landscape, where neither business owner or consumer is safe.

The Insolvency Service, a government agency, said insolvencies had risen steadily since 2015 and were now at the highest quarterly total since the start of 2012.

 

The Office for National Statistics has found that households in the UK are spending more than they earn for the first time in 30 years. The average family spent £900 more than they earned last year.

If consumers and business owners are to avoid insolvency, this is not viable independently. As consumer sentiment becomes further financially cautious, business owners will need to work hard to recommend their product or service. This can be achieved through an injection of cash, allowing the owner to focus on expansion or innovation to attract attention.

At the Credit Protection Association, our debt recovery service has been used in this respect and allowed business owners to pursue new opportunities. The CPA team has chased down unpaid invoices and residual debt and repaired any gaping holes in cash flow. Credit managers are aware of the dangers that are involved in business management and at CPA we have shifted our priorities accordingly.

CPA has launched a new line of defence against business debt. Along with our credit management and debt recovery efforts, we have also turned our focus to eradicating late payment for our Members without damaging goodwill.

Within the Credit Protection Association, we take advantage of the rarely used Late Payment of Commercial Debts (Interest) Act 1998. This recovers for clients late payment compensation in respect of past invoices that were paid to them but paid late. What is more, there is no outlay of funds for clients beyond a small initial processing fee. This, in turn, has unlocked hidden cash and potential for our Members and brightened their prospects and confidence, even in the current business landscape.

Please call us on 0330 053 9263 to discuss how CPA can help your cashflow.
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The Latest Insolvencies to 01 Aug 2018

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