BREXIT and the roll-out of Universal Credit have been blamed after it was revealed the number of people in Scotland being declared insolvent rose by more than 20% in a year.

Accountant in Bankruptcy’s provisional estimates show personal insolvencies increased 20.5% from 10,602 to 12,779 between 2017/18 and 2018/19.

The rise was partly driven by a type of insolvency agreement called a protected trust deed, which rose 32.9% on the previous year.

The number of bankruptcies were up 5% in the same period.

In the first three months of 2019, personal insolvencies rose 29% compared to the same period the previous year, and were up 2% on October to December 2018.

Meanwhile, corporate insolvencies also increased, up 9% from 884 in 2017/18 to 966 in 2018/19.

The number of businesses going bust rose by a third (34%) in the first quarter of 2019, compared to the final quarter of 2018, and were up 8% on the first quarter of 2018.

Business Minister Jamie Hepburn said that Brexit and Tory welfare policy helped explain the increase.

“These figures highlight the challenging economic times we are facing with more Scots experiencing increased financial pressures,” he said. “The ongoing uncertainty around EU exit, alongside the challenges of the roll-out of Universal Credit, bear much of the blame.

“In this climate it is more important than ever that people encountering financial difficulty seek early advice.”

The figures also indicate a rise in approved debt payment programmes through the Scottish Government’s Debt Arrangement Scheme (DAS), which enables people to get their finances in order without insolvency.

A total of 2544 of those were approved in 2018/19, up 226 (10%) on the previous year. In 2018/19, £37.1 million was repaid from debtors under DAS, down slightly from the £37.6 million in 2017/18.

Duncan Swift, vice-president of insolvency and restructuring trade body R3, said the quarter-on-quarter rise in personal insolvencies was not unexpected, as rates have been increasing since 2015. But he added “the comparison with the same quarter last year is especially stark”.

He urged people in financial difficulty to seek help: “Talking to someone, especially a professional adviser, about finances can feel like a big step, but once the subject has been broached, it becomes easier.”