Personal insolvencies in England and Wales fell slightly in the three months to September, but charities have warned that millions of people remain vulnerable.
Figures from the Insolvency Service show that the number of people made insolvent fell by 1% in the third quarter of the year to 30,219.
The number of people declared insolvent has fallen by 10% over the last year, while company insolvencies have increased by 10%.
However, the Consumer Credit Counselling Service (CCCS) is warning against complacency, saying it fears a surge in personal insolvencies over the next 12 months as millions of families remain financially vulnerable.
Research conducted for CCCS by the Financial Inclusion Centre has identified 6.2 million households as financially vulnerable.
It found that 3.2 million are 'already in financial difficulty', either three months behind with a debt repayment or are subject to some form of debt action such as insolvency.
A further three million were found to be 'at risk' of getting into financial difficulty because they are finding it hard to make ends meet and are vulnerable to increases in household bills
"There are millions of people teetering on the brink financially, whose household budgets are getting harder to manage every month. They are struggling against pressures such as high inflation, wage freezes and redundancy," said Delroy Corinaldi, director of external affairs at CCCS.
The Money Advice Trust echoed the sentiments, warning that many UK households face the prospect of insolvency unless they act quickly to get on top of their finances.
Figures show that, at any given time, up to five million people report arrears on consumer credit, failure to keep up with mortgage payments, or that meeting credit commitments is a 'heavy burden', but of these, just one in six seek advice from any source.
Joanna Elson OBE, chief executive of the Money Advice Trust, said that it is getting more expensive for millions of people to make ends meet each month.
"This means there is a great onus on advice agencies and Government to make sure that awareness of free services and the positive impact they can have in changing people's lives for the better is improved," she added.
"When people take the brave step of dealing with their money worries they need to know where to place their first step."
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