THE number of people being declared bankrupt has soared by nearly a third during the past year to its highest level for more than a decade.

During the final three months of 2003, 10,271 people in England and Wales became insolvent, 12 per cent more than during the previous quarter and a 28.9 per cent leap on the same period in 2002.

The Department of Trade and Industry said it was the highest figure since the first quarter of 1993, when 10,942 people were declared bankrupt.

Accountancy group PricewaterhouseCoopers (PwC) said last year saw 36,328 individuals declared bankrupt.

The rise was not mirrored in the number of companies that became insolvent during the final three months of the year.

That figure fell to 3,316, 1.9 per cent less than during the three months to the end of September and a 22.5 per cent fall on the same quarter of 2002.

Nick Reed, a director in the Yorkshire Business Recovery Services practice at PwC, said: "We have seen real winners and losers.

"The increase in consumer debt has led to record levels of personal insolvencies, but it may also have provided a fillip to struggling businesses.

"Increased consumer spending is filtering through to businesses with a significant fall in company failures."

The insolvency figures were released the day after the Bank of England's monetary policy committee raised interest rates by 0.25 per cent to four per cent, a move which will increase the pressure on people already troubled by debt.

Andrew Redmond, chief executive of debt advice group Debt Free Direct, said the rate rise would increase the number of people who are struggling to keep up with their debts from 2.3 million to 6.46 million.

Paul Dutton, of Eversheds in Newcastle, who is chairman of the North-East branch of the Association of Business Recovery Professionals, said: "The steep increase in personal insolvencies continues to concern the insolvency profession.

"It confirms that credit is too easily available to many individuals today. There is an increasing risk, in a relatively low interest environment, that large numbers of individuals are not addressing their financial problems quickly enough."

Mr Dutton said the fall in corporate insolvencies was encouraging and showed that more firms in trouble were taking advice early.