Personal insolvencies increased by 12% in January

Latest monthly figures from the Insolvency Service for England & Wales have indicated that personal insolvencies increased by 12% in January 2026 compared to January 2025, rising to 10,843 from 9,644. Personal insolvencies were 20% lower in December 2025 compared to January 2026, when numbers were affected by a temporary backlog.

The personal insolvency data consisted of 780 bankruptcies, 3,847 debt relief orders (DROs) and 6,216 individual voluntary arrangements (IVAs).

The 6,216 IVAs registered in January 2026 was 29% lower than in December 2025, but 18% higher than in January 2025. There were 3,847 DROs, this was 6% lower than in December 2025. Monthly numbers over the past two years have been higher than at any other point since their introduction, following the removal of a fee for entering a DRO in April 2024.

The number of bankruptcies in January 2026 was 780, which was 24% higher than in December 2025 and 30% higher than in January 2025. There were 5,008 Breathing Space registrations in January 2026. This was 39% lower than in January 2025.

Tom Russell, who is also a licensed insolvency practitioner and director at James Cowper Kreston and R3 President said “In January 2026, 10,843 individual insolvencies were recorded in England and Wales. This represented a 12% increase compared with January 2025, but a 20% decrease in December 2025, when figures were affected by a temporary backlog of IVAs agreed in November but not registered until December.

“Individual insolvencies in January 2026 consisted of 780 bankruptcies, 3,847 were debt relief orders (DROs) and 6,216 were individual voluntary arrangements (IVAs). DRO volumes fell from December 2025 but remained close to the historically high levels recorded over the past two years. IVA numbers were slightly above the 2025 monthly average. Bankruptcies increased month on month, although figures were influenced by the partial clearance of a backlog following the Insolvency Service’s move to a new case management system.

“Personal insolvency levels remain somewhat elevated, and we expect this trend to continue while food, energy and other essential costs remain high. Many people in financial difficulty are turning to Debt Relief Orders (DROs) and Individual Voluntary Arrangements (IVAs) as a way of managing unsustainable debts.

“With cost-of-living pressures continuing to bite, some households are increasingly relying on short-term buy now, pay later, borrowing to cover everyday essentials. It is therefore welcome that, from July, the sector will be brought under Financial Conduct Authority regulation, which should strengthen consumer protection.”