By Kylie MacLellan

LONDON (Reuters) - A record number of people in England and Wales succumbed to bad debts in the third quarter of this year but the pace at which companies went bust slowed, official figures showed on Friday.

The Insolvency Service said company liquidations rose 14.6 percent on a year ago to 4,716 in the three months to September, after jumping nearly 40 percent in the second quarter.

Personal insolvencies rose 28.2 percent on a year ago to 35,242, the highest since records began in 1960, and analysts said worse was still to come.

"Individual insolvencies will continue to rise for some time to come, despite current mounting signs that the economy will finally return to growth in the fourth quarter," said Howard Archer, economist at IHS Global Insight.

"Unemployment has already risen substantially and is likely to climb significantly further, many people are suffering wage freezes or even cuts, debt levels have risen and credit conditions remain very tight."

While the rate of company insolvencies slowed, the numbers remained high. Analysts predicted the easing would be temporary, with failures expected to rise further in 2010 as measures taken to stimulate the economy are gradually wound down.

Several famous companies have succumbed to Britain's worst recession in decades and many others are fighting for survival. In October the owner of national off-licence chain Threshers, First Quench Retailing, filed for administration.

Last month restructuring specialist Begbies Traynor said 134,000 companies had shown signs of distress in the third quarter and that the worst is yet to come for corporate insolvencies.