Personal insolvencies fall

Latest monthly figures from the Insolvency Service for England & Wales have indicated that personal insolvencies decreased by 0.5% in May 2025 to a total of 10,014 compared to April 2025’s total of 10,060, and increased by 5.5% compared to May 2024’s figure of 9,493.

The personal insolvencies consisted of 648 bankruptcies, 3,783 debt relief orders (DROs) and 5,583 individual voluntary arrangements (IVAs). 

Bankruptcy numbers were 4% higher than in May 2024, but remained at less than half of pre-2020 levels.

There were 3,783 DROs. This is 2% lower than the number registered in April 2025. The number of bankruptcies in May 2025 was 648, which is 4% higher than in April 2025 and 4% higher than in May 2024.DRO numbers in May 2025 remained similar to the record-high levels seen over the past 12 months. 

IVA numbers in the first five months of 2025 were similar to the monthly average in 2024. The 5,583 IVAs registered in May 2025 were similar to April 2025 and 13% higher than in May 2024. IVA numbers in the first five months of 2025 were similar to 2024.

There were 7,805 Breathing Space registrations in May 2025. This is 2% higher than in May 2024.

Tom Russell, President of R3, the UK’s insolvency and restructuring trade body, and a Licensed Insolvency Practitioner and Director at James Cowper Kreston, said “Turning to personal insolvencies, the modest monthly fall in numbers is a result of a reduction in the number of people entering a Debt Relief Order and an Individual Voluntary Arrangement (IVA), while the year-on-year increase is due to a rise in IVA numbers. We have also seen a slight increase in the number of bankruptcies compared to last month and this time last year.

“However, the increase in Breathing Space numbers means that, overall, more people are seeking some form of support compared to last month and last year, and illustrates that the debt issue in England and Wales has got worse over the last three months – and has returned to the highs we saw at the start of the year.

“The cost of living continues to affect consumers as their money continues to go less and less far. Although inflation has fallen from the recent highs, the reality is that people are still paying more for less and prices are continuing to rise after three years of increases.

“The cost of living and the future of the economy remain key areas of concern for households, and these worries, coupled with the fact a number of household bills went up in April, means people are continuing to be prudent with their discretionary spending, avoiding making any major purchases unless they are absolutely necessary, and adjusting their wider spending wherever they can in order to cover their costs. Value is very much front of mind at the moment, with shoppers remaining on the hunt for deals and discounts and looking to modify or change their shopping habits to ensure their money goes as far as possible.”