“This is also reflected in the financial hardship trends.
“Personal loan hardships are up 45% year on year and now account for nearly a quarter (24%) of all hardship cases.”
Overall, financial hardship cases fell by 600 on a monthly basis to 14,200 – and are 3.7% lower year on year.
Meanwhile, consumer arrears rose to 12.56% of the credit-active population, up from 12.07% in December, taking the number of people behind on their payments to 491,000 – an increase of 20,000.
“Consumer arrears typically peak in January following the holiday period, and this seasonal pattern has again been reflected in the latest data,” Lacey said.
Lacey said despite the seasonal lift, arrears levels were 0.8% lower than a year ago.
Mortgage arrears also rose slightly to 1.42% of the active population in January, with 22,600 home loans past due.
However, mortgage arrears are 9% lower year on year.
Inland Revenue keeps pressure on businesses
Company liquidations rose to 2952 on a rolling 12-month basis, up 16% year on year, according to Centrix.
There were 115 liquidations in January, the highest January total since 2013.
Nearly 70% of all liquidation applications are initiated by Inland Revenue, compared with 30%-40% in 2020 and 2021.
Construction remains the leading contributor with 758 firms (0.9% of sector) liquidated over the past year.
Hospitality is second, with 382 (1.2% of sector) liquidations, up 53% year on year.
“While overall liquidation levels remain high, the percentage of businesses impacted is low and signs of improvement are emerging across seven of the 19 industry sectors – notably in agriculture, wholesale trade, and information media and telecommunications services,” Lacey said.
“The road to recovery seems to be coming into clearer view, but there are still challenging times ahead as the economy turns a corner.”
