The number of people going financially insolvent jumped to its highest levels in nearly three years in the first quarter of 2017, official figures show.
Some 24,531 personal insolvencies were recorded across England and Wales in March, marking the highest level seen since the second quarter of 2014, according to the Insolvency Service.
The quarterly total is 15.7% higher than the same period a year earlier and a 6.7% increase compared with the final quarter of 2016.
The upswing was mainly driven by an increase in individual voluntary arrangements (IVAs), which made up 59% of the quarterly total.
Debt relief orders (DROs) accounted for a quarter (25%) of personal insolvencies between January and March, while the remaining 16% were bankruptcies, which are often seen as a "last resort".
IVAs are arrangements whereby money owed is shared out between creditors. DROs are available to people with less than £20,000 of debt.
The figures also show an estimated 3,967 companies entered insolvency across England and Wales in the first quarter of 2017.
This was a sharp 29.1% fall compared with the last three months of 2016 but up by 5.3% compared with the first quarter of 2016.
The Insolvency Service said a "one-off event" in the final quarter of 2016 had been behind an unusually high number of company insolvencies in the last three months of 2016.
But it said that if this one-off event were to be excluded from the figures, the underlying trend would show a 4.5% increase in company insolvencies compared with the underlying number in the final quarter of 2016.
Mark Sands, a personal insolvency partner at RSM, said: "Employment levels are high, interest rates are at historic lows, so you would expect the level of financial distress within households to be relatively low.
"However, I think we are just beginning to see a change in the wind direction. Many people may have been tempted by attractive loan deals, car finance offers and low fixed-rate mortgages but are now finding that shop-price inflation is leaving them with less available cash to meet repayments when they fall due."
The Insolvency Service's figures were released as the British Bankers' Association (BBA) said annual growth in consumer borrowing slowed in March in signs that rising prices are biting into people's spending. The BBA said consumer credit grew by 6.1% in March, down from a 6.5% annual uplift in February.
A recent Bank of England survey of banks and building societies found lenders expect to impose stricter criteria for people trying to take out credit cards in the coming months.
Concerns have been raised over previous reports showing strong growth in consumer credit, prompting warnings that some households could be putting themselves at risk of over-stretching themselves financially.
Adrian Hyde, president of insolvency and restructuring trade body R3, said: "The past year and a bit has been much more challenging for businesses.
"The pound's fall in value since last year's referendum will have hurt importers, while many of the currency hedges that protected larger companies in the immediate aftermath of the referendum will have begun to unwind at the start of the year."
He continued: "It's worth noting, however, that insolvencies usually rise in the first three months of the calendar year as many companies come to the end of their financial year and have to make some difficult decisions."
Mr Hyde said rising inflation and slowing real wage growth will be limiting people's financial room for manoeuvre.
He said: "Compared to where insolvency numbers were a few years ago, personal insolvency rates are still low and the recent bankruptcy rises have been very small.
"However, a continued gradual upwards shift may be a sign that the post-recession return of high levels of consumer borrowing and spending is starting to reach its limits."
Glyn Mummery, a partner at FRP Advisory, said: "Sectors led by the construction, food and agriculture, hospitality and even the care sectors are now finding the pain of last summer's 20% sudden and unexpected decline in the value of the pound unsustainable, with cashflow constraints forcing many to restructure or seek exit strategies via both solvent and insolvent mechanisms."