UK Personal Insolvencies Might Rise by 20%

Debt Advice Foundation - UK charity that provides Brits with free confidential advice on debt matters - recently announced that UK is still sitting on financial time bomb.

The organisation believes that the number of personal insolvencies might skyrocket by as much as 20% in the near future as a result of the spending review.

Let us remind that the Comprehensive Spending Review might lead to abolition of 500,000 public sector jobs, which will significantly affect the level of unemployment in UK. This, in turn, will lead to an increase in personal insolvencies regardless of the fact that they have significantly decreased in the past 2 quarters.

Commenting on the current situation, Mr. Rodger, M.D. at Debt Advice Foundation, said that "although insolvency volumes are the product of a number of contributory factors, unemployment, particularly new unemployment, is a key determinant. If the predicted spending cuts go ahead we could see insolvencies rise to in excess of 40,000 per quarter, which is 20% higher than present levels."