12% annual jump in personal insolvencies across England and Wales in January

The number of people going financially insolvent across England and Wales jumped by 12% in January compared with the same month a year earlier, according to Insolvency Service figures.

Some 9,706 people entered insolvency last month, which was 3% lower than in December 2024 but 12% higher than in January 2024.

Personal insolvencies are made up of bankruptcies, debt relief orders (DROs) and individual voluntary arrangements (IVAs).

The 3,847 DROs registered in January 2025 was 82% higher than the long-term (2014 to 2023) monthly average of 2,114, although below a record high of 4,336 seen in June 2024, the Insolvency Service said.

It said that a rise in DRO numbers since April 2024 coincided with the abolition of a £90 admin fee to obtain a DRO and the expansion of eligibility criteria in June 2024.

The debt threshold for having a DRO was increased from £30,000 to £50,000 and the allowable value of an exempt motor vehicle was increased from £2,000 to £4,000.

Totalling 5,267, the number of IVAs registered in January 2025 was 6% lower than the average monthly number seen in 2024, the report said.

At 592 in January 2025, bankruptcy numbers remained at about half of pre-2020 levels.

In addition to the personal insolvency figures, there were 8,240 breathing space registrations under the debt respite scheme in January, which was 1% lower than in January 2024.

The debt respite scheme gives people a time period to make plans to deal with their debts, without added pressure from creditors.

Meanwhile, there were 1,971 company insolvencies registered in January 2025, which was 6% higher than in December 2024 and 11% higher than the same month in the previous year.

Company insolvencies over the past year have been slightly lower than in 2023, which recorded a 30-year high, but have remained high relative to historical levels, the Insolvency Service said.