The figures from the Insolvency Service marked the depth of the recession, with 35,574 people declared insolvent in the last three months of the year.

That was a rise of 25% on the same period a year earlier.

Over 2009 as a whole, there were 134,142 people declared insolvent in England and Wales. This was up 26% compared with 2008, and higher than the previous record – in 2006 – of 107,288. Records began in 1960.

The quarterly total was made up of 17,007 bankruptcies – down 5.5% on the same quarter of the previous year, 13,219 Individual Voluntary Arrangements (IVAs) – up 26.3% on the corresponding quarter of the previous year, and 5,348 Debt Relief Orders (DROs) – which were introduced in April.

These DROs allow people with debts of less than £15,000 and relatively few assets to write off these debts without a full-blown bankruptcy.

Record low interest rates would have staved off insolvencies for some people, but long-term unemployment would make it difficult for others to avoid the situation.

IVAs could also have risen as people cutting hours instead of being made redundant had some funds to pay back debts instead of going bankrupt.

Many experts have suggested that there will be more pain to come despite the UK coming out of recession.

Compared with the last recession in the early 1990s, the latest figures show a very different picture.

The number of individual insolvencies has shot up in the past decade, and now far outstrip the numbers seen in 1992 and 1993 of about 37,000 each year, although it is easier now to be declared bankrupt.

Experts said this was because the amount of credit built up by individuals – especially on plastic – mushroomed in the last decade. Since 1993, the amount of personal debt in the UK – including mortgages – has risen from £398bn to £1.46 trillion.

IVAs were also in their infancy in 1992-3.

This means that 0.3% of the adult population was declared insolvent in 2009, a far higher rate than the 0.1% recorded in 1992 and 1993.

But the number of companies being wound up, via various forms of liquidation, still falls far short of those recorded in 1992.

Then, 24,000 companies were wound up, 2.6% of all companies in existence.

The current liquidation rate, which has increased in the past two years, is still less than 1%.