Personal insolvencies jumped by 7% during the second quarter of 2020, according to new data.
Government statistics show there were 32,153 individual insolvencies in the three months to June following a rise in Individual Voluntary Arrangements (IVAs).
However, the figures were slightly lower than analysts had predicted and also revealed a significant fall in company insolvencies due to state support schemes.
They also showed that bankruptcies dived by around 40% to 2,415 in the period, while debt relief orders also substantially decreased.
The Insolvency Service said this was “likely to be a least partly driven by Government measures put in place in response to the coronavirus pandemic”.
Meanwhile, business insolvencies decreased dramatically as firms were kept afloat by Government support measures in the aftermath of the crisis.
The number of corporate insolvencies decreased by 33% to 2,974 in the second quarter, compared with the same period last year.
Maxime Lemerle, director of sector research at credit insurance company Euler Hermes, said: “Today’s data is rosier than many would have dared predict at the start of the quarter.
“However, the UK economy is facing a ticking timebomb in terms of insolvencies on the horizon.”
Colin Haig, president of restructuring trade body R3, said: “Despite the fact we’ve had the lowest quarter for corporate insolvencies since 2010, now is not the time to be lulled into a false sense of security.
“We have not seen the full impact of Covid-19 on businesses because of the lifeline the Government’s support has provided.
“What we do have an idea of, however, is the impact of the pandemic on the economy, and we know it has been disastrous.”