20th May 2025 11:10
(Alliance News) - The number of people going financially insolvent in England and Wales jumped in April, according to Insolvency Service figures.
Some 10,012 people entered insolvency in England and Wales last month, which was 8% higher than in March 2025 and 4% higher than in April 2024.
The total was made up of 589 bankruptcies, 3,837 debt relief orders [DROs] and 5,586 individual voluntary arrangements [IVAs].
DRO numbers in April remained similar to the record high levels seen over the past year, the Insolvency Service said.
The rise in DROs has coincided with the expansion of eligibility criteria and the removal of an administration fee.
The Insolvency Service's report said: "DRO numbers have been at record high monthly numbers since the abolition of the upfront GBP90 fee in April 2024, with the 45,959 DROs in the past 12 months being nearly twice as high as the long-term annual average."
IVA levels were also similar to average levels seen in 2024, it added, while bankruptcy numbers remained at about half of pre-2020 levels and were also 11% lower than in April 2024.
As well as formal insolvencies, there were 7,273 breathing space registrations in April, made under the Debt Respite Scheme. This was 5% lower than in April 2024.
Within the breathing space registrations total, 7,170 were standard registrations and 103 were mental health breathing space registrations.
A standard breathing space gives people with problem debt legal protections from creditor action for up to 60 days.
A mental health crisis breathing space is available to those receiving mental health crisis treatment. It lasts as long as the person's mental health crisis treatment, plus 30 days.
Households faced various bill increases in April, putting an additional strain on some people's finances.
There were also 2,053 company insolvencies in England and Wales in April 2025, which was 3% higher than in March 2025 but 5% lower than the same month in the previous year.
The report said: "Company insolvencies over the past 12 months have been slightly lower than in 2023, which saw a 30-year high annual number, but have remained high relative to historical levels."
There were 379 compulsory liquidations – the highest monthly number since September 2014. Compulsory liquidations were 24% higher than in March 2025 and 33% higher than in April 2024.
Giuseppe Parla, business recovery director at Menzies, said: "An uptick in corporate insolvencies is a clear sign that many UK businesses are still walking a financial tightrope.
"April brought a series of tax changes that may have disrupted cash flow for smaller firms already grappling with rising input costs and soft consumer demand. This may have tipped the balance for already-vulnerable businesses.
"On top of that, renewed global uncertainty – including the threat posed by US tariffs on trade partners across the world – is making forward planning even harder for manufacturers and exporters.
"Until there is greater stability across tax, trade and interest rate policy, we expect further volatility in insolvency trends – especially in sectors where margins remain tight and confidence is low."
By Vicky Shaw, PA Personal Finance Correspondent
Press Association: Finance
source: PA
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