Personal insolvencies in England and Wales rose by 14% last year.
According to the Insolvency Service, 117,947 people were declared insolvent in 2024.
That’s a sharp increase from the 103,434 recorded in the previous year.
This means that one in every 415 adults in England and Wales faced insolvency in 2024, compared to one in 467 the year before.
In December alone, 10,050 individuals became financially insolvent – a 23% increase year-on-year.
Record-breaking rise in debt relief orders
A big contributor to the overall surge was a record-breaking increase in debt relief orders (DROs), as they went up by 36% to 43,249.
This increase is likely linked to policy changes, including the removal of a £90 administrative fee in April and an increase in the eligible debt limit from £30,000 to £50,000 in June.
IVAs the most common form of insolvency
Individual voluntary arrangements (IVAs) accounted for 57% of all cases in 2024, making them the most common type of insolvency overall.
Meanwhile, DROs comprised 37% of the total, and bankruptcies made up the remaining 6%.
2025 set to be ‘another difficult year’
Tim Cooper, president of insolvency and restructuring trade body R3, has predicted that financial pressures are likely to persist into 2025.
This, he said, is because of factors such as the energy price cap rise, as well as upcoming price increases by retailers.
As a result, Mr Cooper believes people who are struggling with their finances to seek professional advice as soon as they can.
“We have seen many cases where early intervention could have led to a better financial outcome,” he commented.
“Taking action sooner rather than later is key.”
Written by James Glynn
Senior Financial Content Writer
