EXPERTS have warned of a worrying North-South insolvency divide, despite new figures showing the number fell to an eight-year low.

A Government report says 101,049 individuals became insolvent in 2013, the lowest number since 2005, with 14,982 companies going into liquidation.

The number of individuals becoming insolvent in 2013 fell by eight per cent compared with 2012, while the number of companies going out of business fell by 7.3 per cent.

Mark Sands, personal insolvency partner at Baker Tilly, which has offices in Sunderland, said: “The good news is we’re back to pre-crash levels and expect this to signal some stability going forward.

“However, our figures indicate there continues to be a significant North-South divide with London registering only 15 personal insolvencies per 10,000 people, while the North-East is double that at 30.”

Allan Kelly, chairman of insolvency trade body R3 in the North-East and head of Tait Walker's turnaround and insolvency team, said the Government had to take further action.

He added: “The fall in new personal insolvency cases is clearly welcome, but we are concerned the official statistics are the tip of the iceberg.

“The Government monitors only new bankruptcies, debt relief orders, and individual voluntary arrangements, but does not record new debt management plans (DMP).

“Until the Government begins to monitor new DMPs, the true scale of personal insolvency will be hidden.

“It will be interesting to see how these figures change in the first quarter of 2014.

“Consumer debt has started to climb, while the expected rise in interest rates will very likely have a knock-on effect on insolvency numbers.”