Bankrupt and Insolvent

There were 135,089 people declared insolvent last year in England and Wales, the Insolvency Service said, the highest since records began in 1960.

A spokesman for the Association of Business Recovery Professionals said. "Worryingly, these figures do not include the number of people using informal insolvency solutions such as debt management plans, of which there are estimated to be around 700,000.Unfortunately, for those that are struggling with debt the worst may not be over. Inflation, the rise in the cost of fuel and the increase in VAT means that the cost of living has risen at a time when most of us are experiencing pay freezes, pay cuts and, in some cases, unemployment."

Pat Boyden, partner and personal insolvency expert at PricewaterhouseCoopers, said: "Evidence suggests that people are struggling more with their day-to-day financial pressures such as utility bills rather than their levels of existing debt."

In January, figures from the Scottish body Accountant in Bankruptcy revealed that 1,098 companies in Scotland were declared insolvent during the year - a record number.