Credit, Collections & Insolvency News
Latest monthly figures from the Insolvency Service for England & Wales have indicated that personal insolvency figures increased by 22.8% in January 2024 to a total of 8,089 compared to December 2023’s total of 6,585, and increased by 4.3% compared to January 2023’s figure of 7,756.
There were 8,089 insolvencies in January 2024, 4% higher than in the same month in the previous year (7,756 in January 2023).
The personal insolvencies figures consisted of 768 bankruptcies, 2,793 debt relief orders (DROs) and 4,528 individual voluntary arrangements (IVAs). The higher number of personal insolvencies compared to January 2023 was driven by a 60% increase in the number of DROs and a 20% increase in the number of bankruptcies, while the number of IVAs was 16% lower. IVA numbers in 2023 were lower than in 2022, which saw a record high annual number. DRO and bankruptcy numbers in 2023 were higher than in 2022, although the number of bankruptcies remained well below pre-2020 levels.
There were 2,793 DROs in January 2024. This was 60% higher than January 2023. DRO numbers have increased over the past year, with the annual 2023 number being a record high.
There were 4,528 IVAs registered in January 2024, 16% lower than January 2023. IVA numbers in 2023 were lower than the record-high numbers in 2022.
There were 768 bankruptcies in January 2024. The bankruptcies were made up of 606 debtor applications and 162 creditor petitions. Bankruptcies were 20% higher than in January 2023. Debtor applications were 17% higher and creditor petitions 31% higher than in January 2023. Bankruptcy numbers remained below pre-2020 levels.
In January 2024 there were 8,356 breathing space registrations. This is 10% higher than the number in January 2023. Of the 8,356 Breathing Space registrations i 8,232 Standard breathing space registrations, which is 10% higher than the number in January 2023. There were 124 Mental Health breathing space registrations, which is 27% higher than the number in January 2023.
Nicky Fisher, President of R3, the UK’s insolvency and restructuring trade body said “Personal insolvency numbers rose month-on-month and year-on-year, with numbers increasing for every personal insolvency process compared to December 2023, and a rise in Debt Relief Orders and Bankruptcies and a fall in Individual Voluntary Arrangement numbers compared to January 2023.
“This suggests that there is a short-term increase in demand for all kinds of personal insolvency support, and that more people are looking for support with higher levels of personal debt than last year, due to the increase in DRO and Bankruptcy levels compared to January 2023’s figures.
“Breathing Space numbers also soared to the highest levels since the process was introduced in May 2021, which potentially indicates an increased need for a break from creditor pressure following the festive period, but what this means for personal insolvency levels in the short and long-term remains to be seen.
“We know January is traditionally a tough month for consumers – and this was no exception. Christmas came at the end of a year of increased expenses, and the outgoings associated with it may have been the tipping point for those who had been scraping by until then.
“Food, fuel, housing and energy costs remain high – as they have for a long time now – and remain key concerns for many households. If costs continue to rise, and this isn’t matched by an increase in wages, we could see personal insolvency numbers rise over the course of this year.”
