More people were unable to pay their debts in Pembrokeshire in 2022 new figures show, as Citizens Advice warns people are at risk of ‘spiralling into debt’ amid the cost of living crisis.

New figures from the Insolvency Service show there were 231 personal insolvencies in Pembrokeshire over 2022, up from 197 in 2021.

A person becomes insolvent when they are unable to pay their debts – and are left with a choice of declaring bankruptcy or taking on measures to pay them back.

However, this was still lower than before the pandemic – in 2019, 244 insolvencies were registered in the area.

In Pembrokeshire, 179 Individual Voluntary Arrangements (IVAs) were granted in 2022, along with 13 declarations of bankruptcy.

IVAs involve a person in debt agreeing to a repayment plan with their creditor, who may agree to reduce or stop interest payments over the same period.

There have been an increasing number of these nationally, while bankruptcies have declined from nearly 17,000 in 2019 to under 7,000 in 2022.

The same figures released this month show there were 119,000 insolvencies across England and Wales in 2022 – up from 110,000 the year before, but down from a peak of 122,000 in 2019.

Morgan Wild, head of policy at Citizens Advice, said: “The cost-of-living crisis is far from over. We’re seeing huge numbers of people under significant financial pressure, with many at risk of spiralling into debt.”

In May 2021, the Government launched its Debt Respite Scheme which saw people unable to pay debts become eligible for a ‘breathing space’ which means creditors cannot pursue legal action against them for a set period while they sort their finances out.

Across England and Wales nearly 112,000 registrations have been made for a breathing space since the scheme launched – including 149 in Pembrokeshire.

StepChange, a debt charity that administers breathing spaces, said the scheme has broadly been a success. However, it would like to see the grace period extended.

A spokesperson for the Insolvency Service said: “Ensuring individuals in financial difficulty have access to effective solutions remains one of our top priorities, and that is why costs for administering personal insolvency procedures are kept to a minimum.

“Last year, we published the Personal Insolvency Review call for evidence, which sought views on fees and funding specifically to determine whether changes are needed, and we will be publishing our findings in due course.”