Latest predictions suggest personal and business insolvency rates are dropping to levels last seen before the financial crisis, and are forecast to continue falling.

Statistics from RSM Tenon's online Tracker system show that Q1 2013 had the lowest level of personal insolvencies since early 2008. The analysis indicates 25,000 people opted for insolvency, a 16% drop on 2012.

Individual Voluntary Arrangements (IVAs) also decreased by 11% over the same period.

Mark Sands, head of personal insolvency at RSM Tenon said: 'The decline in personal insolvencies in the first quarter of 2013 is expected to be repeated throughout 2013, and 2013 is likely to see personal insolvency levels drop below 100,000 for the first time since 2005.'

Industry body R3 reports that business insolvencies are also declining, down 11% from the peak of 25,432 in 2009 to reach 22,590 in 2012.

It highlights recent research conducted by ComRes on behalf of R3 shows that engaging with insolvency practitioners (IPs) does not necessarily signal the end of a business. The study found that in 45% of cases, the business advised by IPs avoided full closure, while of those in formal insolvency procedures, 27% continued in some form.

ComRes calculates that as a result, the UK insolvency industry saved over 750,000 jobs and 6,000 businesses in 2012.