Personal insolvencies increase by 6.8%

Latest monthly figures from the Insolvency Service for England & Wales have indicated that personal insolvency figures increased by 6.8% in August 2025 to a total of 11,348 compared to July 2025’s total of 10,624, and increased by 16.1% compared to August 2024’s figure of 9,778.

In August 2025, 11,348 entered insolvency in England and Wales.  The personal insolvency figures consisted of 622 bankruptcies, 4,239 debt relief orders (DROs) and 6,487 individual voluntary arrangements (IVAs).

There were 4,239 DROs in August, hitting a record high in the monthly time series going back to their introduction in 2009, exceeding the previous high of 4,191 in June 2024.

The 6,487 IVAs registered in August 2025 was 8% higher than in July 2025 and 27% higher than in August 2024. 

The number of bankruptcies in August 2025 was 622, which is 1% higher than in July 2025 and 2% higher than in August 2024.

There were 7,395 breathing spaces registered under the Debt Respite Scheme in August 2025. This is 2% higher than in August 2024. Of the 7,395 breathing space registrations, 7,290 were Standard breathing space registrations and 105 were Mental Health breathing space registrations. 

Tom Russell, President of R3, the UK’s restructuring, turnaround and insolvency trade body, and a Licensed Insolvency Practitioner and Director at James Cowper Kreston, said “On the personal insolvency front, there has been a marked increase in Debt Relief Orders and Individual Voluntary Arrangements. This trend suggests a worrying jump in financial distress among both those who are worse off and those with more substantial incomes. This has been accompanied by a significant 12% month-on-month decline in breathing space registrations; however, the number is still up by 2% compared to this month last year.

“Debt Relief Orders (DRO) provide a vital option for those in the worst situation with very limited assets and income, and their rising numbers reflect the reality that more households are unable to meet basic costs. The cumulative effect of rising utility bills, housing costs and continuing food price inflation has left many families struggling to make ends meet. For these people, DROs can offer a much-needed mechanism to resolve unsustainable debts.

“Overall, the August data is likely to underline a sense of “stable stress”: insolvency activity remains high but not volatile, reflecting an economy marked by caution, cost pressures and policy uncertainty. Businesses and households alike are holding back, waiting for clarity on future conditions. Unless greater stability emerges – through clearer policy direction, lower borrowing costs or easing inflation – insolvency levels are unlikely to fall back to pre-pandemic norms in the near term.”