One indicator that many people are struggling with debt in the United Kingdom comes with the fact that the number of people who have classed as insolvent has risen, for the fifth year in succession. This is another warning sign that many people are unable to deal with debt but it seems as though the situation could be a lot worse. This is because the low interest rates mean that the total isn’t as bad as it could be, so this is an instance of interest rates assisting people improve their finances.

The total number of people who were classed as having “unmanageable debts” for the second quarter of 2016 stood at 22,503. This figure, which related to England and Wales, was provided by the Insolvency Service programme. The figures represent a 22% rise on the total announced for the second quarter of 2015.

The lower level of interest rates is likely to continue for some time, which means that many people will be able to just about stay on top of their debt. While this is a positive thing, it is only a minor reprieve and there needs to be more of a focus on finding long term solutions to debt problems in the United Kingdom.

Scotland has seen a big rise in personal insolvencies

One factor that drove the increase was a 15% rise in the level of Individual Voluntary Arrangements, which is a situation where the person in debt comes to an agreement on repaying that debt with their creditors. There was worrying news in Scotland which saw a 50% in the level of personal insolvencies, with 2,405 people moving into this status in 2016’s second quarter. In Northern Ireland, a total of 755 people moved into this status, which represents an 8.5% on the same quarter from a year before.

There is some positive news in the fact that the more traditional style of bankruptcy, where a person can lose their home, has fallen. This should be seen as a positive sign as no one should be looking to lose their home if it can be avoided at all. The current financial situation, for many people across the United Kingdom, is quite difficult, which is why help needs to be provided wherever it can.

There are ways in which people can move towards a brighter future with respect to their finances, and one way is to consider a guarantor loan. This could be the ideal solution for consolidating debt and moving towards a brighter and more sustainable financial future. Anyone that needs advice or guidance on guarantor loans and their finances will find that help is available.