IVA Statistics

03/11/2017
IVA Statistics

In the first three quarters of 2017 44,400 people started an IVA. This is an increase of 20% over the same period in 2016.

  • IVA Statistics table
  • Number of people starting an IVA up 20%
  • Why are more people using IVAs?
  • Are personal debt problems rising?

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IVA Statistics Table

Qtr 1Qtr 2Qtr 3Qtr 4Total
201714,07212,52217,81344,407
20169,62212,34314,869 12,58349,417
20159,5658,85811,42110,54040,384
201412,71414,49213,14311,84152,190
201311,12612,10813,39112,25648,881
201211,69411,34612,65310,98146,674
201110,81812,1421305113,04749,058
201011,78213,46612,96012,48550,693
20099,80712,22512,39013,21947,641

Source: The Insolvency Service Official Statistics (Not Seasonally Adjusted)

Number of people starting an IVA up 20%

The number of people starting an IVA has been rising since the beginning of 2016. So far in 2017 the numbers have increased 20% over the same period last year.

If the current rate of increase is maintain then 2017 will see the largest number of IVAs started since the solution was introduced in the mid 1980s.

It would be easy to point to this growth as an indication that personal debt problems in the UK are significantly increasing. However during the same period the number of individuals going bankrupt actually stayed the same.

Why are more people using IVAs?

A significant reason for the growth of IVAs over the past couple of years is change within the debt management regulatory regime. Since April 2014 the FCA has significantly increased regulation surrounding the provision of Debt Management Plans (DMP).

To avoid this regulation a number of providers have changed the focus of their business away from the DMP solution. Instead they are concentrating on marketing IVAs. As a result more people have started an IVA rather than a DMP.

This is not necessarily a bad thing. One of the advantages of an IVA over a DMP is that the payments last for a fixed period of 5 years. A DMP on the other hand will last for as long as it takes for the debt to be paid in full.

Are Personal Debt Problems rising?

It is difficult to say whether the number of people struggling with debt in England & Wales is on the increase. The number of people going bankrupt is static. Arguably recent growth in IVAs is just people who would otherwise have started a DMP.

The underlying number of people struggling with debt is still 30% lower than that seen just after the last recession. In 2010 the total number of people declared formally insolvent was just over 135000. In 2017 it is likely to be around 100,000.

However there are signs suggesting that there will be rises in the near future. Forecasters predict that rising inflation, driven by the depreciation of sterling and rising interest rates, will squeeze household incomes. This will mean more people start to struggle with debt repayments.