According to the latest statistics from the Insolvency Service, there were 19,683 individual insolvencies between July and September, up 2.8% from the previous quarter, but down 18.5% compared with same time last year.
The increase in individual insolvencies was driven by a rise in IVAs, which comprised 51.8% of all insolvencies.
Meanwhile, due to a decrease in compulsory liquidations – the lowest since 1989 – the number of company insolvencies in England and Wales continued to fall during the third quarter.
The number of bankruptcies fell 3.3% from the second quarter of 2015 and 21.4% from same period last year to 3,857.
Phillip Sykes, president of R3, the insolvency trade body, said easier access to non-traditional finance for businesses may be helping to keep the number of insolvencies down.
“Peer-to-peer lenders and venture capitalists are keen to lend as they can see better rates of return than from traditional investments,” Sykes said.
However, the report said the introduction of debt relief orders in 2009 in likely to have affected the number of bankruptcies.
Meanwhile, the rate of insolvency decreased to its lowest rate in ten years, with 1 in 550 adults becoming insolvent.
Furthermore, a total of 612 companies were subject to a compulsory winding-up order - 20.4% down from last quarter and 29.2% lower than same time last year - and 3,539 companies entered insolvency, 4.4% less than Q2 and 10.2% lower than one year earlier.
The report also found the industry sectors with the highest number of new company insolvencies were construction, wholesale and retail trade, repair of motor vehicles and motorcycles, administrative and support services activities, accommodation and food service activities and manufacturing.
Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said, “With household debt rising and higher interest rates on the horizon, there is no room for complacency.”
Elson added increased borrowing and higher interest rates in the future mean that debt problems are likely to increase.
Mike O’Connor, chief executive of StepChange debt charity, said, “It is good to see bankruptcy and debt relief orders reducing, but the fact that overall insolvency levels are rising is a reminder that personal debt remains a persistent problem."
O’Connor urged Government to introduce statutory ‘breathing space’, with guaranteed freezes on interest and charges and a halt on enforcement action in a bid to tackle debt.
“With credit markets loosening and creditors beginning to lend more freely, it is vital that we do not return to the high levels of unsustainable credit and the big boom in insolvencies we saw following the economic crisis,” he said.