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Government invests in debt reduction as insolvency skyrockets

The UK government has pledged to help tackle Britain's growing mountain of consumer debt by investing further into free advice services and improving consumes' financial knowledge, the Daily Telegraph has reported.

In its latest report, Tackling Over-Indebtedness 2006, the government has reportedly outlined its commitment to the introduction of basic financial skills into the National Curriculum in England from 2008.

The government also plans to invest a GBP51 million to provide a further 500 staff to offer free advice to people struggling to manage their debt. The National Debtline and Consumer Credit Counselling Service will also be expanded.

The actions are the government’s attempt to offset the findings of the report by the Department for Trade and Industry, which warned that up to 28,000 people will declare themselves bankrupt each quarter by March 2009, almost double the record numbers currently going under.

The report also sought to rebuff claims that a recent relaxation in the bankruptcy laws was to blame for the surge in the insolvency rates in 2006.

The government’s proposed action follows the recent announcement that the number of Britons going bankrupt during the second quarter of 2006 reached record levels, with 26,021 entering insolvency during April and June, up 66% on the previous year.