By Maximilian Clarke

Numbers of people entering into bankruptcy have dropped by 11% in a year, reaching levels not seen since 2004, the government’s insolvency figures show.

Consumers have been increasingly paying off credit card and overdraft facilities as economic uncertainty persists. Last month, Prime Minister David Cameron uttered a plea urging Britons to pay off their personal debt- a plea he later retracted after retailers cautioned that paying off debt will result in less money spend in the high streets- compounding retail unemployment and decline. But today’s figures suggest his advice was not needed and that consumers have been addressing their own debts.

Commenting on the figures is Pat Boyden, partner and personal insolvency expert at global professional services and auditors, PwC: "Despite the poor economic climate, the overall trend is of personal insolvencies continuing to fall, a trend that we predicted last year and believe will continue into next year.

"The big story is the massive fall in bankruptcies. This is the lowest quarterly figure since 2004 when we saw just under 9,000 people entering bankruptcy. Consumers do not have the credit card and personal loan debt that they had five years ago - they have not been able to take on any more debt, partly because of the fall in new lending from banks and credit companies and partly because times are hard.

"Although consumers are still trying to deal with the debts they have, as their debt reduces, their main struggle will be to meet their basic living costs, for example paying high rents, fuel and council tax bills and food costs."

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