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The number of insolvencies in the second quarter of 2007 rose by 4.2 per cent on the same period last year in England and Wales, official figures show.

Statistics from the Insolvency Service published today show that there were 26,956 individual insolvencies in total – an 8.1 per cent fall on the first three months of the year.

Of these, 16,258 were bankruptcies and 10,698 were individual voluntary arrangements (IVAs). The balance between the two has moved away from IVAs, which fell by 0.7 per cent compared to the second quarter of 2006. Bankruptcies rose by 7.7 per cent in the equivalent period.

Analysts say the year-on-year data is more telling than the quarterly change, which is susceptible to seasonal fluctuations.

Interest rates are currently at their highest level since January 2001, making it more difficult to finance heavy personal debts.

The ifs School of Finance has said boosting teaching at secondary-school level on personal finance will help more people cope with the strain of higher debts.

Rod McKee, the financial education charity's head of financial capability, commented: "The insolvency figures released today again highlight the need to ensure people have sufficient financial skills to make informed financial decisions."

"Equipped with such skills the number of people who find themselves facing unmanageable debt problems will reduce considerably."

Meanwhile the number of company insolvencies fell year-on-year in the second quarter by 4.2 per cent. There were 1,349 company liquidations in the same period, an increase of 12.4 per cent on the second quarter of 2006, however.