Personal insolvencies fall by 14%

Latest monthly figures from the Insolvency Service for England & Wales have indicated that personal insolvency figures fell in October with 8,952 individuals entering into insolvency, this was 14% lower than in September 2024.

The personal insolvencies consisted of 596 bankruptcies, 3,793 debt relief orders (DROs) and 4,563 individual voluntary arrangements (IVAs). Monthly DRO numbers between April and October 2024 were at record highs.

The number of IVAs registered in October was lower than the average monthly number seen over the past 12 months.  Average monthly IVA numbers so far in 2024 have been lower than during 2022, which saw a record-high annual number, but slightly higher than the monthly average in 2023. The 4,563 IVAs (after seasonal adjustment) registered in October 2024 were 13% lower than in October 2023 and 23% lower than in September 2024.

There were 3,793 DROs, which is slightly lower than the number registered in September 2024 and 12% lower than the record high seen in June 2024.

The number of bankruptcies was 596, which is lower than the monthly numbers seen over the past 12 months, although slightly higher than in September 2024.

Meanwhile, there were 7,099 breathing spaces registered under the Debt Respite Scheme in October 2024. This is 7% lower than in October 2023. Of the 7,099 breathing space registrations, 7,002 were Standard breathing space registrations and 97 were Mental Health breathing space registrations.

Commenting on the figures, Tim Cooper, President of R3, the UK’s insolvency and restructuring trade body said “The monthly fall in numbers is due to a reduction in Debt Relief Order (DRO) and Individual Voluntary Arrangement (IVA) numbers, while the year-on-year fall in personal insolvencies is a result of fewer people entering an IVA than this time last year. DRO numbers have increased compared to this time last year, and this is because of changes to the debt threshold and the removal of the administration fee earlier this year, which has enabled more people to access this process.

“Breathing Space figures for September are unavailable, but the figures for October are 7% lower than the ones for the same month last year. Overall, while there has been a marginal improvement in personal financial distress in England and Wales, there were still more than 16,000 people seeking some form of either debt or insolvency support last month and personal finance issues are still a reality for a great many people.

“The main cause of this is the ongoing cost of living. Household budgets remain tightly stretched after two years of rising prices, and people are looking to save ahead of Christmas and the increase in heating and lighting costs that the winter months bring. People remain very concerned about their ability to pay their bills and are avoiding spending money on luxuries or major purchases and looking for deals, bargains and discounts as they look to cut costs wherever they can.”