Bankruptcy rates highest in the north

THE number of Scots being made bankrupt continues to outstrip that south of the Border after it was revealed yesterday that insolvencies in England and Wales fell in the last quarter.

The government's Insolvency Service recorded a 3 per cent drop in the number of personal insolvencies in England and Wales in the three months to the end of June, the first decline since 2007.

However there was a 4 per cent rise in the number of Scots going bust over the same period, the Scottish Government's Accountant in Bankruptcy revealed last month. There were 5,378 personal insolvencies in Scotland over the quarter, up from 5,175 in the first three months of the year. The latest figures mean that 0.43 per cent of the Scottish population has been made bankrupt in the last year, compared to 0.26 per cent in England and Wales.

And Bryan Jackson, corporate recovery partner at PKF business advisers and accountants, warned that Scotland's high dependence on public sector employment could spark a new surge in insolvencies north of the Border once government spending cuts kick in.

"The impact on personal insolvency is likely to be quite marked when these cuts are implemented," said Jackson. "Worryingly we now appear to accept very high levels of personal debt and consequent insolvency as a reasonable situation for tens of thousands of Scots."

Meanwhile research from R3, the insolvency practitioners' trade body, shows that Scottish holidaymakers are twice more likely than those elsewhere in the UK to fund their holidays with debt.

The study found that 12 per cent of Scots said they would use credit cards or loans to pay for their annual holiday this year, compared with an average of 6 per cent across the UK as a whole.

John Hall, Scottish council member for R3, said: "Given that we have a rate of personal insolvency which is running at twice that of the rest of the UK perhaps this goes some way toward explaining why."