Personal insolvencies fall by 3.4%

Latest monthly figures from the Insolvency Service for England & Wales have indicated that personal insolvency figures decreased by 3.4% in January 2025 to a total of 9,706 when compared to December 2024’s total of 10,045, and increased by 11.6% compared to January 2024’s figure of 8,698.

Personal insolvencies consisted of 592 bankruptcies, 3,847 debt relief orders (DROs) and 5,267 individual voluntary arrangements (IVAs).

The 5,267 IVAs (after seasonal adjustment) registered in January 2025 was 5% higher than in January 2024, but 12% lower than in December 2024. IVA numbers in 2024 were slightly higher than in 2023 but lower than during 2022, which saw a record high annual number.

There were 3,847 DROs, which is higher than the number registered in December 2024, but lower than the record high seen in June 2024. The number of DROs in January 2025 was 82% higher than the long-term (2014 to 2023) monthly average of 2,114, and monthly numbers between April 2024 and January 2025 were higher than at any other point since their introduction.

The number of bankruptcies in January 2025 was 592, which is lower than the 2024 monthly average. Bankruptcy numbers have declined since 2009 and fell further during the Covid-19 pandemic.

There were 8,240 Breathing Space registrations in January 2025. This is 1% lower than in January 2024.

Tim Cooper, President of R3, the UK’s insolvency and restructuring trade body, and a Partner at Addleshaw Goddard LLP said “When it comes to personal insolvencies, while overall numbers are higher than they were a year ago, the increase is down to a higher number of people entering a Debt Relief Order (DRO) – and is likely to be a result of the changes in debt threshold and the removal of the administration fee that were introduced last year. Breathing Space numbers are at their highest since this time last year, and this – coupled with the figures for personal insolvencies that have been published today – shows that the debt problem faced by households in England and Wales continues to be a serious one.

“There’s no getting away from the fact that years of rising prices have hit household finances hard, and as we reach the final stages of a long, cold winter, financial concerns remain a constant worry for many. At a time of year where heating and food costs are continuing to rise, people are keeping a close eye on their outgoings and a wary one on their bank accounts as they worry about the future of the economy and their own finances.”