Personal insolvencies increased by 25.1% in February

Latest monthly figures from the Insolvency Service for England & Wales have indicated that personal insolvency figures increased by 25.1% in February 2024 to a total of 10,136 compared to January’s total of 8,103 and increased by 23% compared to February 2023’s figure of 8,239.

Personal insolvencies increased by 3% from when compared to February 2022’s total of 9,837 and increased by 22.4% when compared to pre-pandemic levels in February 2019 (8,278).

The personal insolvency figures consisted of 709 bankruptcies, 3,007 debt relief orders (DROs) and 6,420 individual voluntary arrangements (IVAs). The higher number of individual insolvencies compared to February 2023 was driven by a 44% increase in the number of DROs, and 16% increases in both the number of bankruptcies and IVAs. Numbers in February include an unusually high number of IVAs (more than 1,000) that were approved more than two months earlier, but were not registered until February 2024.

There were 6,420 IVAs registered in February 2024, 16% higher than February 2023. IVA Numbers in February include an unusually high number of IVAs (more than 1,000) that were approved more than two months earlier, but were not registered until February. IVA numbers in 2023 were lower than the record-high numbers in 2022. Numbers in February include an unusually high number of IVAs (more than 1,000) that were approved more than two months earlier, but were not registered until February 2024.

Bankruptcies were made up of 594 debtor applications and 115 creditor petitions. Bankruptcies were 16% higher than in February 2023. Debtor applications were 22% higher and creditor petitions 9% lower than in February 2023. Bankruptcy numbers remained at approximately half of pre-2020 levels.

In February 2024 there were 8,073 breathing space registrations. This is 10% higher than the number in February 2023. There were 7,964 Standard breathing space registrations, which is 11% higher than the number in February 2023 and 109 Mental Health breathing space registrations, which is 22% lower than the number in February 2023.

Nicky Fisher, President at R3, the UK’s insolvency and restructuring trade body said “Turning to personal insolvency, February’s total is the highest we’ve seen in 11 months, and the highest we’ve seen in February for more than four years. The monthly rise has been driven by an increase in both Individual Voluntary Arrangements and Debt Relief Orders, while yearly, we’ve seen a rise in all forms of personal insolvency process.

“Today’s figures highlight that the cost of living remains a major concern, and a major challenge, for many people in England and Wales. High energy costs are at the front of most people’s minds, and while food inflation is falling, prices are still higher than they were a year ago. People are looking to save money wherever they can, and are reluctant to make major purchases.

“The Government’s decision to remove the fee for entering a Debt Relief Order (DRO) and increase the debt threshold for this process to £50k is likely to mean an increase in the number of people entering a DRO and a fall in the amount of people entering other processes.”