In the second quarter of this year, 27,029 people entered in to an IVA or declared themselves bankrupt. This was a 5.1% increase on the same period in 2013, and could be the start of a worrying trend (*Insolvency Service data)
P&A experts believe that the number of insolvencies is likely to increase if interest rates rise – as the Bank of England says they might…
There are a number of significant factors affecting this:
- the last 5 years of low interest rates,
- low mortgage repayments,
- greater use of credit cards
- more extravagant purchases (car sales rose 10% in the last 12 months, 4 / 5 of them on credit…)
Raising interest rates by just 0.5% will increase the cost of a £100,000 mortgage by £60 a month, severely affecting those who have not budgeted for such a rise.
Rises in interest rates at this time are purely speculation, but as the Governor of The Bank of England said recently, he is prepared to do this if necessary. Even if (as we expect) these increases are likely to be small rises now – possibly growing over time – there is no question that interest rates WILL go up at some point, and people and businesses not prepared will be in serious financial difficulty.
If you – or one of your clients – are struggling, P&A can help: we offer IVA solutions or bankruptcy advice for individuals; and CVA’s, Administrations and Liquidations for corporate entities.
Fast, reliable insolvency and business turnaround advice to ensure you or your client has the best prospect of recovery.
Expert knowledge of today’s insolvency challenges backed up by more than 120 years of experience.
- Formal or informal input from attending board meetings to acting as a sounding board for issues.
- A dedicated and highly capable team including one of our three, highly experienced partners.
- The benefit of our excellent relationships with all major clearing banks and HM Revenue & Customs.
- A free, initial consultation at your offices, or ours if preferred.
We are exclusively insolvency practitioners, with no audit division, we ensure that any accountants’ working relationships with clients are preserved at all times.
To discuss the options available to you or your client, please contact us on 0161 228 3028 or click here for further information and to obtain one of our free guides to insolvency.