Personal insolvencies fell slightly last year after hitting the highest level for 20 years in 2009. However, the numbers remain stubbornly high. Are you worried about bankruptcy? Read on to find out where you can get free advice.
Somewhat surprisingly, pensioners are the fastest growing group of bankrupt individuals in the UK. Although levels of bankruptcy among men and women aged over-65 are still the lowest, the numbers have increased six times in a decade and at a 50% faster rate than for other age groups.
Among women over 65, the rate of bankruptcy has grown even more sharply, over ten times between 2000 and 2009 and in London it is 43 times higher.
Una Farrell, from the Consumer Credit Counselling Service, said: "Dealing with debt is particularly hard as you get older as you are likely to have limited opportunities to increase your income. CCCS clients aged 55 and over, have on average, higher debt levels but lower incomes than overall CCCS clients.
The average debt for a CCCS client over the age of 55 is £25,826 compared to £24,274 for CCCS clients overall, while the average annual income of a CCCS client over the age of 55 is £12,920, significantly lower than £17,316 for CCCS clients overall.
"It is very difficult to be struggling financially at a time in your life when you had expected to be more settled. However, there is free help available for those who find themselves in this situation. Anyone worried about debt should seek free advice that is available from a debt charity such as CCCS, National Debtline or their local Citizens Advice Bureau," Farrell addded.
Men still make up the majority of bankrupts (60% in 2009) but the proportion of women bankrupts is growing - from 29% in 2000 to 40% in 2009.
The average age of a bankrupt person in the UK is 41, which is close to the average age of the population (39.5 years).
Since Debt Relief Orders started in April 2009 to the end of September 2010, 30,838 people have taken them out, to free them from unmanageable debt and support them in making a fresh financial start.
'Dealing with your debt' campaign
To encourage more people to deal with their debt, the Insolvency Service is running a week-long 'Dealing with your debt ' campaign this week (until 8 January), supported by Citizens' Advice, the Consumer Credit Counselling Service and the Money Advice Trust.
Stephen Speed, chief executive of the Insolvency Service said: "Prevention is much better than cure as far as personal finances are concerned. Review your personal finances frequently and make sure you are not taking on debt that you can't afford to repay.
"If you are getting into trouble, act quickly and seek advice about how to deal with it. There are plenty of sources of advice, many of which are available free of charge. If insolvency looms then remember that you have choices. Discuss these with your adviser and make sure you understand which one is best for you. The Insolvency Service's booklet, "In debt? Dealing with your creditors" provides clear and impartial information that will help you understand your options."
Teresa Perchard, Citizens Advice director of policy, said: "Post Christmas is a stressful time for many people who are struggling with their debts. Citizens Advice Bureaux are seeing more and more people every year who have trouble making ends meet and covering the most essential household bills. Money troubles don't go away by themselves, as the shocking increase in the number of people seeking bankruptcy shows.
Get advice early
"The good news is that free help and advice is available on the group's website www.adviceguide.org.uk and trained advisers in Citizens Advice Bureaux and other money advice agencies can help you prioritise your debts, negotiate with creditors and provide advice on a range of debt remedies."
The key is to get advice early. If you are at all worried about your finances, don't delay, get help.