Personal insolvencies increased by 7% in 2025

Latest data from the Insolvency Service for England & Wales has shown that personal insolvencies increased by 7% in 2025 when compared to 2024, rising to 126,240 from 117,958 in 2042

The annual number of IVAs in 2025 was 7% higher than in 2024, but remained lower than the record high annual numbers between 2019 and 2022. The 46,939 DROs in 2025 were a record annual high, 9% higher than 2024, and nearly twice the long-term (2015-2024) annual average of 27,021. There were 89,130 breathing spaces registered, a similar level to 2024 and the highest annual total since the start of the scheme in 2021.

The number of bankruptcies in 2025 was 7,460, slightly lower than the 7,622 in 2024 and less than half of pre-2020 levels. Numbers remain much lower than the long-term (2015 to 2024) annual average of 12,278. Bankruptcy numbers have declined since 2009 and fell further during the COVID-19 pandemic.

In 2025, there were 89,130 breathing spaces registered, a similar level to 2024 and the highest annual total since the start of the scheme in 2021. Of these, 87,813 were Standard breathing space registrations, and 1,317 were Mental Health breathing space registrations.

Turning to the monthly figures,  the data for December 2025 showed that there were 13,453 individual insolvencies. The figures consisted of 601 bankruptcies, 4,150 debt relief orders (DROs) and 8,702 individual voluntary arrangements (IVAs). DRO numbers in December 2025 were slightly lower than the record high seen in August 2025. Number of IVAs in November and December. The figures were affected by a temporary backlog, meaning that IVAs that would otherwise have been registered in November were instead registered in December. The total number of registered IVAs for November 2025 and December 2025 was 18% higher than the equivalent two months of 2024. Bankruptcy numbers remained at about half of pre-2020 levels but were 4% higher than in December 2024.

There were 3,884 breathing spaces registered under the Debt Respite Scheme in December 2025. This is 31% lower than in December 2024. Of the 3,884 breathing space registrations, 3,786 were Standard breathing space registrations, and 98 were Mental Health breathing space registrations. Between the start of the scheme in May 2021 and 31 December 2025, StepChange Debt Charity registered 59% of breathing spaces.

R3, the UK’s trade body for restructuring, turnaround and insolvency professionals, says the data shows that households are facing continued financial strain. Tom Russell, R3 President, said “Personal insolvencies, including debt relief orders (DROs) and individual voluntary arrangements (IVAs) in 2025 were the highest in fifteen years and 7% up on last year, with 126,240 cases. DROs were at their highest annual level since being introduced sixteen years ago, indicating a worrying jump in financial distress among people with limited assets and income.

“Many households are struggling financially, using credit to pay for everyday essentials like food and household bills with debt charities reporting busy helplines in January, as people seek advice on how to pay priority bills. For these people, DROs can offer a much-needed mechanism to resolve unsustainable debts.

“While overall inflation has eased, food and energy prices remain stubbornly high. Bank of England data shows credit card defaults are now at a two-year high and as a result, there is every chance personal insolvencies will rise in 2026 as indebted individuals turn to DROs and IVAs to manage their debts.”