The number of people entering insolvency in England and Wales was 14 per cent higher in July than in the same month last year, according to official figures, driven by a rise in individual voluntary arrangements.
A total of 11,926 individuals entered insolvency during the month, Insolvency Service data show, of which 7,442 were individual voluntary arrangements (IVAs) – agreements in which people who cannot pay their debts reach a deal with their creditors as an alternative to bankruptcy. With the exception of December 2025, when figures were inflated by the clearing of a backlog of cases agreed in earlier months, it was the highest monthly IVA total since November 2022.
In the 12 months to the end of July, one in 360 adults in England and Wales entered insolvency, a rate of 27.8 per 10,000 adults. A year earlier the rate stood at 24.3 per 10,000, or one in 412.
Sonia Jordan, the president of R3, the insolvency trade body, said the figures underlined “the continued pressure on household finances”.
“Many households continue to struggle with debt and there is a clear need for effective support and breathing space,” she said. “Government support such as the £150 energy bill discount and the freeze on bus fares will provide some relief. Recent figures showing a decline in mortgage arrears and repossessions are also encouraging, but financial pressures remain.”
Debt relief orders (DROs) – which allow people with debts below £50,000, few assets and little spare income to write off what they cannot pay – fell 4 per cent compared with July 2025, to 3,820. Monthly numbers so far this year remain above last year’s average, and since the fee for entering a DRO was removed in April 2024, monthly totals have been higher than at any point since the orders were introduced in 2009.
There were 5,248 registrations under the “breathing space” scheme, which gives people temporary protection from creditors while they take debt advice and put a plan in place – 38 per cent fewer than in July 2025. Numbers have been lower since December 2025, after StepChange, the largest money adviser group by number of cases, updated its suitability criteria.
The overall number of individual insolvencies in July was similar to June. Across the 12 months to 31 July, IVAs accounted for 59 per cent of individual insolvencies, debt relief orders 35 per cent and bankruptcies 6 per cent, with the Insolvency Service noting a long-term decline in the proportion of cases that are bankruptcies.
IVA numbers have been rising since 2023, and in the first seven months of 2026 were 14 per cent higher than the 2025 monthly average, although they remain below the levels recorded between 2018 and 2022. The highest numbers came before the Financial Conduct Authority banned debt packagers from receiving referral fees for introducing customers to IVA firms in June 2023, and before professional insolvency bodies tightened related rules.
Separately, 1,931 registered company insolvencies were recorded in England and Wales in July, 5 per cent higher than in June but 5 per cent lower than the same month a year earlier.
