Accredited official statistics

Commentary - Individual Insolvency Statistics August 2024

Published 20 September 2024

Released

20 September 2024

Next release

18 October 2024

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Statistical enquiries

Gary McElroy (author)

[email protected]

David Webster (responsible statistician)

This publication relates to individual insolvency only. Statistics relating to company insolvency can be found on the company insolvency releases page.

1. Main messages for England and Wales

• After seasonal adjustment, 10,000 individuals entered insolvency in England and Wales in August 2024. This was 5% lower than in July 2024, but 16% higher than in August 2023.

• The individual insolvencies consisted of 594 bankruptcies, 4,166 debt relief orders (DROs) and 5,240 individual voluntary arrangements (IVAs). The last five months all saw the highest monthly numbers of DROs since their introduction. This followed the removal of the £90 administration fee to obtain a DRO from 6 April 2024 and the expansion of eligibility criteria in June 2024. The number of IVAs registered in August was similar to the average monthly number over the past 12 months. Bankruptcy numbers remained at about half of pre-2020 levels and were also lower than numbers seen over the past 12 months.

• In the 12 months ending 31 August 2024, one in 441 adults in England and Wales entered insolvency (a rate of 22.7 per 10,000 adults). This is slightly lower than the rate of 23.0 per 10,000 adults (1 in 435) who entered insolvency in the 12 months ending 31 August 2023.

• There were 7,256 Breathing Space registrations in August 2024. This is 5% lower than in August 2023.

Figure 1: Individual insolvency numbers were lower in August 2024 than in July 2024, driven by declines in IVA and bankruptcy numbers.

Monthly individual insolvencies by type, England and Wales, August 2019 to August 2024, seasonally adjusted

Source: Insolvency Service

The long-term series back to January 2000 (where applicable) can be found in the comma-separated values (CSV) file that accompanies this release. Data prior to 2000 can be found in the long-run individual insolvencies CSV file or back to 1960 (where available) on the National Archives website.

1.1 Things you need to know about this release

This statistics release contains the latest data on individual insolvency in the United Kingdom, presenting the numbers of individuals who have entered a formal insolvency procedure after being unable to pay their debts. Informal debt solutions, such as debt management plans, are not included in these statistics. Information is presented separately for England & Wales, Scotland and Northern Ireland.

Underlying data for these monthly statistics for England and Wales were adjusted using an autoregressive integrated moving average (ARIMA) model where there was evidence of seasonality. This removal of systematic calendar-related variation enables comparisons to be made between months and the underlying trend in insolvency numbers to be determined. In accordance with the outcome of the April 2024 Seasonal Adjustment Review, bankruptcies, DROs and IVAs were all seasonally adjusted.

The number of breathing space registrations under the Debt Respite Scheme are included in these statistics. Individuals that register for breathing space may or may not end up entering a formal insolvency procedure. Those that do enter a formal insolvency procedure will be counted accordingly in Tables 1 to 5 of the accompanying tables.

Population estimates for people over the age of 18, as published by the Office for National Statistics, were used to calculate individual insolvency rates per 10,000 adults. For 2024, the 2021-based population projections were used as more recent population estimates were not yet available.

All figures presented within this release are provisional and subject to review. Further detail can be found in the accompanying Individual Insolvency Statistics Methodology and Quality document.

1.2 Designation as accredited official statistics

These accredited official statistics were independently reviewed by the Office for Statistics Regulation (OSR) in July 2024. They comply with the standards of trustworthiness, quality, and value in the Code of Practice for Statistics and should be labelled ‘accredited official statistics’.

Further details of the OSR’s review of these statistics can be found in their published Compliance Check. You are welcome to contact us directly with any comments about how we meet these standards. Alternatively, you can contact OSR by emailing [email protected] or via the OSR website.

2. Individual insolvency in England and Wales

2.1 Number of individual insolvencies

After seasonal adjustment, 10,000 individuals entered insolvency in England and Wales in August 2024. This was 5% lower than in July 2024 and 16% higher than in August 2023. The change of 5% compared to July 2024 is smaller than the average absolute change of 7% between consecutive months over the past three years. The trend of higher numbers of DROs since April 2024 coincided with the abolition of the £90 administration fee to obtain a DRO and the expansion of eligibility criteria in June 2024.

Total individual insolvency numbers peaked in 2009 and 2010 following the recession in 2008-09, before decreasing over the next five years as the number of bankruptcies declined. An increase in IVA numbers between 2015 and 2019 then resulted in a corresponding increase in overall insolvency numbers. During the coronavirus (COVID-19) pandemic, numbers of bankruptcies and DROs decreased and the increase in IVA numbers slowed, so overall individual insolvency numbers were lower between 2020 and 2022 than in 2019, despite a record high annual number of IVAs in 2022.

Numbers of IVAs declined in 2023 to the lowest level since 2017. This coincided with changes to the wider regulatory landscape, including the FCA introducing a ban on debt packagers receiving remuneration for referrals to IVA firms; and Recognised Professional Bodies adopting a new Statement of Insolvency Practice in relation to take-on procedures. DRO numbers increased between 2021 and 2023, coinciding with an expansion of the eligibility criteria in June 2021, as well as the introduction of new DRO hubs in February 2023. Bankruptcy numbers increased in 2023 from the 40-year low seen in 2022, but remained less than half of pre-2020 levels.

While DRO numbers in the past few months were at record highs, IVA numbers in the first eight months of 2024 were similar to those seen in the second half of 2023, while bankruptcy numbers were slightly lower. The 10,000 individual insolvencies in August 2024 was 9% higher than the average of 9,136 over the previous 12 months.

Figure 2: Individual insolvency numbers in August 2024 were lower than in July 2024 but higher than in August 2023, with DROs reaching record high monthly levels in 2024

Monthly individual insolvencies by insolvency type, England and Wales, January 2000 to August 2024, seasonally adjusted

Source: Insolvency Service

The long-term series back to January 2000 can be found in the CSV file that accompanies this release. Data prior to 2000 can be found in the long-run individual insolvencies CSV file or back to 1960 (where available) on the National Archives website.

These monthly statistics are seasonally adjusted to account for seasonal variation in insolvencies across the year and allow the underlying trend to be determined. Both adjusted and unadjusted numbers can be found in the accompanying data tables.

In the 12 months to 31 August 2024, 56% of individual insolvencies were IVAs, 36% were DROs, and 7% were bankruptcies. This means that more than one in three individual insolvencies were DROs, compared to one in four in the previous 12 months (ending August 2023), when 68% of individual insolvencies were IVAs, 25% were DROs, and 6% were bankruptcies. The long-term trend shows a decrease in the proportion of individual insolvencies that are bankruptcies. Ten years ago, 52% of individual insolvencies were IVAs, 27% were DROs and 21% were bankruptcies.

IVAs

IVA numbers over the past 12 months have been lower than during 2022, which saw a record high annual number. The 5,240 IVAs (after seasonal adjustment) registered in August 2024 was 1% higher than in August 2023, but 9% lower than in July 2024.

Additional information relating to IVA numbers, including numbers by date of approval of creditors, can be found in Tables 1a, 1b and 1c of the accompanying data tables.

DROs

In August 2024, there were 4,166 DROs, which is similar to the number registered in July 2024 and 5% lower than the record high monthly number seen in June 2024. The number of DROs in August 2024 was nearly twice as high as the long-term (2014 to 2023) monthly average of 2,114, and monthly numbers between April and August 2024 were higher than at any other point since their introduction.

Following an announcement on 6 March 2024, the £90 administration fee to obtain a DRO was abolished on 6 April 2024. Furthermore, on 28 June 2024, the criteria for DRO eligibility was expanded. The debt threshold 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.

Additional information relating to DRO numbers, including numbers by authorising body, can be found in Tables 1a, 1b and 7a of the accompanying data tables.

Bankruptcies

The number of bankruptcies in August 2024 was 594, which is lower than monthly numbers seen over the past 12 months. Bankruptcy numbers have declined since 2009 and fell further during the COVID-19 pandemic. Numbers remain much lower than the long-term (2014 to 2023) monthly average of 1,129.

Additional information relating to bankruptcy numbers can be found in the sections below, as well as in Tables 1a and 1b of the accompanying data tables. Information relating to Income Payment Agreements and Income Payment Orders in bankruptcy cases can be found in Table 5.

Table 1: The number of individual insolvencies was higher in August 2024 than in August 2023 and slightly lower than in July 2024

Individual insolvencies, England and Wales, August 2023 to August 2024, seasonally adjusted

Period	Total individual insolvencies	Bankruptcies	Debt relief orders	Individual voluntary arrangements
Aug 2023	8,652	682	2,784	5,186
May 2024	9,440	625	3,818	4,997
Jun 2024	10,570	666	4,379	5,525
Jul 2024	10,536	647	4,160	5,729
Aug 2024	10,000	594	4,166	5,240
Percentage change, latest month compared to:
vs Aug 2023	16%	-13%	50%	1%
vs Jul 2024	-5%	-8%	0%	-9%

Source: Insolvency Service

The long-term series back to January 2000 can be found in the CSV file that accompanies this release. Data prior to 2000 can be found in the long-run individual insolvencies CSV file or back to 1960 (where available) on the National Archives website.

2.2 Breathing space registrations

There were 7,256 breathing spaces registered under the Debt Respite Scheme in August 2024. This is 5% lower than in August 2023. Of the 7,256 breathing space registrations, 7,138 were Standard breathing space registrations and 118 were Mental Health breathing space registrations. Between the start of the scheme in May 2021 and 31 August 2024, StepChange Debt Charity registered 61% of breathing spaces.

More information on numbers of Breathing Spaces, including by money advisor group, can be found in Tables 6 and 7c of the accompanying data tables.

Figure 3: The number of Breathing Spaces in August 2024 was slightly lower than in August 2023

Monthly Breathing Space registrations by type, England and Wales, May 2021 to August 2024, not seasonally adjusted

Source: Insolvency Service

2.3 Rates of individual insolvency per 10,000 adults

The individual insolvency rate in the 12 months to August 2024 was 22.7 per 10,000 adults in England and Wales (as shown in Table 2 and Figure 4 below). This corresponds to one in 441 adults having entered an insolvency procedure in the past 12 months.

The rate in the 12 months to August 2024 was lower than the rate in the 12 months to August 2023. This was driven by a decline in IVA numbers since the second half of 2023, which exceeded increases in DRO and bankruptcy numbers.

The insolvency rate is calculated as a proportion of the adult population, and is therefore more comparable over longer time periods than absolute numbers. A 12-month rolling rate is presented to reduce the volatility that would be associated with estimates based on single months. The August 2024 rates, for example, were calculated using data covering the period 1 September 2023 to 31 August 2024.

Table 2: The rate of individual insolvency in the 12 months to August 2024 was lower than for August 2023, as the decrease in the IVA rate exceeded increases in DRO and bankruptcy rates

England and Wales, 12 month rolling rate per 10,000 adults, August 2023 to August 2024

Period	Total individual insolvencies	Bankruptcies	Debt relief orders	Individual voluntary arrangements
Aug 2023	23.0	1.5	5.8	15.8
May 2024	21.7	1.7	7.4	12.6
Jun 2024	22.0	1.7	7.7	12.6
Jul 2024	22.6	1.7	8.0	12.9
Aug 2024	22.7	1.6	8.3	12.8
Change in rate, latest month compared to:
vs Aug 2023	-0.3	0.1	2.5	-3.0

Please note that the total values may not equal the sum of their components due to rounding.

The long-term series back to January 2000 (where applicable) can be found in the CSV file that accompanies this release. Data prior to 2000 can be found in the long-run individual insolvencies CSV file or back to 1960 (where available) on the National Archives website.

In the 12 months to August 2024:

• The IVA rate decreased by 3.0 in comparison to the 12 months ending August 2023;

• the rate of DROs increased by 2.5;

• the rate of bankruptcy increased by 0.1.

Further details can be found in Table 2 of the accompanying data tables.

Figure 4: The individual insolvency rate in the 12 months to August 2024 was slightly lower than in the 12 months to August 2023

12-month rolling insolvency rate per 10,000 adults, England and Wales, January 2000 to August 2024

Source: Insolvency Service

The long-term series back to January 2000 (where applicable) can be found in the CSV file that accompanies this release. Data prior to 2000 can be found in the long-run individual insolvencies CSV file or back to 1960 (where available) on the National Archives website.

2.4 Bankruptcies by petition type

After seasonal adjustment, there were 594 bankruptcies in August 2024, consisting of:

• 454 resulting from debtors’ applications, which was 7% lower than in July 2024 and 13% lower than in August 2023;

• 140 resulting from creditors’ petitions, which was 12% lower than in July 2024 and 13% lower than in August 2023.

In August 2024, 76% of bankruptcies resulted from debtors’ applications. This is similar to the levels seen in August 2023, but is lower than the 85-90% seen during the COVID-19 pandemic, when restrictions applied to creditor petitions.

More detail can be found in Tables 3a and 3b of the accompanying data tables.

Figure 5: Numbers of bankruptcies resulting from both debtors’ applications and creditors’ petitions decreased in August 2024

Monthly bankruptcies by petition type, England and Wales, August 2019 to August 2024, seasonally adjusted

Source: Insolvency Service

The long-term series can be found in the CSV file that accompanies this release. Data prior to 2000 can be found in the long-run individual insolvencies CSV file or back to 1960 (where available) on the National Archives website.

2.5 Bankruptcies by self-employment status

Bankruptcies by self-employment status are presented with a lag of two months compared to most of the other statistics in this release. This is because it can take several weeks for information relating to trading status to be recorded following the date of the bankruptcy order.

In June 2024, there were 140 bankruptcies (seasonally adjusted) where the individual was self-employed. This is 35% higher than May 2024 and 17% higher than in June 2023. There were 394 bankruptcies among other individuals in June 2024, a decrease of 7% compared with the previous month and 15% lower than in June 2023.

More detail can be found in Tables 4a and 4b of the accompanying data tables. Note that in approximately 13% of bankruptcy cases in the past three years, the employment status is unknown.

Figure 6: The number of self-employed individuals entering bankruptcy in June 2024 was higher than in May 2024

Monthly bankruptcies by employment status, England and Wales, June 2019 to June 2024, seasonally adjusted

Source: Insolvency Service

The long-term series can be found in the CSV file that accompanies this release. Data prior to 2000 can be found in the long-run individual insolvencies CSV file or back to 1960 (where available) on the National Archives website.

2.6 Self-employed/trader bankruptcies by industry (SIC 2007)

This section breaks down the self-employed bankruptcies (also referred to as ‘trader bankruptcies’) in the previous section by Standard Industrial Classification (SIC 2007) categories. Figures in this section are summed over 12 months to reduce the volatility associated with month-to month changes. As noted in the previous section, data for July 2024 and August 2024 are not yet available.

The industries (in accordance with SIC 2007) that experienced the highest number of trader bankruptcies in the 12 months to June 2024 were:

• Other service activities (423, which was 29% of trader bankruptcies);

• Construction (368, 25%);

• Accommodation and food service activities (146, 10%);

• Transportation and storage (129, 9%); and

• Wholesale and retail trade; repair of motor vehicles and motorcycles (106, 7%).

These five categories made up 80% of trader bankruptcies in the 12 months to 30 June 2024. They were also the most common categories in the 12 months to 30 June 2023, when they made up 79% of trader bankruptcies. Changes in volumes of trader bankruptcies between the 12 months to 30 June 2023 and the 12 months to 30 June 2024 in the largest categories ranged from a 23% decrease in Wholesale and retail trade; repair of motor vehicles and motorcycles to a 27% increase in Other service activities.

Note that the numbers of insolvencies in these categories are likely to be partly driven by the number of self-employed people trading in a given category and do not reflect the relative likelihood of traders in each industry entering insolvency.

Figure 7: Most Industries saw in an increase in self-employed bankruptcies in the 12 months to June 2024 compared to the previous 12 months

Self-employed bankruptcies by Industry (1-level Standard Industrial Classification) England and Wales, 12-month sum, July 2022 to June 2024

Source: Insolvency Service

Monthly numbers back to 2021 and annual numbers back to 2014 are available in Table 4c of the accompanying data tables.

The quarterly long-term series back to 2013 can be found in the now discontinued quarterly insolvency statistics. Data prior to 2013 can be found on the National Archives website.

3. Individual insolvency in Scotland

Legislation relating to individual insolvency in Scotland is devolved. The Accountant in Bankruptcy (AiB), Scotland’s Insolvency Service, administers individual insolvency in Scotland. The figures below are not seasonally adjusted. The AiB produces individual insolvency statistics on a quarterly basis. Therefore, the numbers in this section are updated once every three months only.

The quarters referred to are calendar year quarters, such that Q2 2024 covers the period 1 April to 30 June 2024. In Q2 2024, there were 2,056 individual insolvencies in Scotland, which was lower than in the same quarter of 2023.

The individual insolvencies were comprised of 1,348 protected trust deeds and 708 bankruptcies (also known as sequestrations), of which 389 went into bankruptcy via the minimal asset process route. The rules regarding bankruptcy differ to those in England and Wales, so numbers of bankruptcies are not directly comparable.

Figure 8: The number of individual insolvencies in Scotland in Q2 2024 was lower than Q2 2023

Quarterly individual insolvencies by type. Scotland, Q2 2014 to Q2 2024, not seasonally adjusted

Source: Accountant in Bankruptcy, Scotland

The long-term series can be found in the long-run individual insolvencies CSV file.

More detail can be found in the AiB statistical release.

4. Individual insolvency in Northern Ireland

Individual insolvency in Northern Ireland is governed by separate, but broadly similar, legislation to England and Wales, and so figures are presented separately.

In August 2024, there were 90 individual insolvencies in Northern Ireland. This was 35% lower than in August 2023. There were 67 IVAs, six bankruptcies and 17 DROs.

Figure 9: Total individual insolvencies in August 2024 were lower than in August 2023

Monthly individual insolvencies by type, Northern Ireland, August 2019 to August 2024, not seasonally adjusted

Source: Department for the Economy, Northern Ireland

The quarterly long-term series can be found in the long-run individual insolvencies CSV file.

5. Data and Methodology

5.1 Data sources

Individual insolvency data for England and Wales were sourced from the Insolvency Service Case Information System (ISCIS); individual insolvency data for Northern Ireland were sourced from the Department for the Economy. Numbers for Scotland were sourced from AiB Official Statistics. Breathing space data for England and Wales were sourced from the Breathing Space register.

Population estimates for people over the age of 18, as published by the Office for National Statistics, were used to calculate individual insolvency rates per 10,000 adults. For 2024, the 2021-based population projections were used as more recent population estimates were not yet available.

More information on the administrative systems used to compile insolvency statistics can be found in the accompanying Individual Insolvency Statistics Methodology and Quality document.

5.2 Coverage

This statistical release presents individual insolvency statistics for England & Wales, Scotland and Northern Ireland. More detailed individual insolvency statistics for Scotland can be found on the AiB website. Insolvency statistics for Scotland and Northern Ireland are presented separately to statistics for England and Wales as they are covered by separate legislation and policy responsibility lies with the devolved administrations and may therefore not be directly comparable.

Informal debt solutions, such as debt management plans, are not included in these statistics.

5.3 Methodology and data quality

Detailed methodology and quality information for the monthly insolvency statistical releases can be found in the accompanying Individual Insolvency Statistics Methodology and Quality document.

The main quality and coverage issues to note:

1. This statistical release presents the numbers of IVAs based on their date of registration on Insolvency Service systems. Where there are significant delays in the registration of IVAs, numbers presented here will not reflect the number of IVAs agreed in a given month. Table 1c of the accompanying data tables presents numbers by approval date.

2. Underlying data for these monthly statistics for England and Wales were adjusted using an ARIMA model where there was evidence of seasonality. This removal of systematic calendar-related variation enables comparisons to be made between months and the underlying trend in insolvency numbers to be determined. Data for Scotland and Northern Ireland were not adjusted. The seasonal adjustment models are reviewed on an annual basis. In accordance with the outcome of the April 2024 Seasonal Adjustment Review, bankruptcies, DROs and IVAs were all seasonally adjusted. Seasonal adjustment in this publication typically results in numbers being adjusted by up to 10%. There are a few cases where the adjustment is larger. For example, bankruptcy numbers tend to be 20-30% lower during December than other months and therefore the process of seasonal adjustment increases the December bankruptcy numbers by approximately this amount to correspond to the underlying trend.

3. Insolvency Service data for the most recent month were extracted five working days after month end and may be revised in the future. In particular, some creditor bankruptcies for the latest month may not yet have been entered onto the administrative system at the time of data extraction.

5.4 Revisions

These statistics are subject to revisions, as set out in the published Revisions Policy. Revisions tend to be made as a result of data being entered onto administrative systems after the cut-off date for data being extracted to produce the statistics. In addition, seasonally adjusted numbers are revised in subsequent publications, as the ARIMA model used is updated with additional data. Any future revisions will be noted in the accompanying data tables.

6. Glossary

6.1 Key terms used within this statistical bulletin

Term	Definition
ARIMA model	Autoregressive integrated moving average, or ARIMA, is a model fitted to time-series data to understand the underlying trend or to forecast future data points. In this publication, ARIMA models with both non-seasonal and seasonal components are fit to insolvency data. The model removes the seasonal component of the data, including effects resulting from the time of year, as well as the varying number of trading days in different months. This allows month-to-month comparisons to be made.
Bankruptcy	A form of debt relief available for anyone who is unable to pay their debts. Assets owned will vest in a trustee in bankruptcy, who will sell them and distribute the proceeds to creditors. Discharge from debts usually takes place 12 months after the bankruptcy order is granted. Bankruptcies result from either Debtor application – where the individual is unable to pay their debts, and applies online to make themselves bankrupt, or Creditor petition – if a creditor is owed £5,000 or more, they can apply to the court to make an individual bankrupt. These statistics relate to petitions where a court order was made as a result, although not all petitions to court result in a bankruptcy order.
Breathing Space	For individuals, the Breathing Space scheme, launched on 4 May 2021, gives people legal protections from their creditors for 60 days, with most interest and penalty charges frozen, and enforcement action halted. Because problem debt can be linked to mental health issues, these protections are also available for people in mental health crisis treatment – for the full duration of their crisis treatment plus another 30 days.
Debt Relief Order (DRO)	A form of debt relief available to those who have a low income, low assets and debt no more than a specified value. There is no distribution to creditors, and discharge from debts takes place 12 months after the DRO is granted. DROs were introduced in April 2009. Following an announcement on 6 March 2024, the £90 administration fee to obtain a DRO was abolished on 6 April 2024. Furthermore, on 28 June 2024, the criteria for DRO eligibility was expanded. The debt threshold 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.
Individual Voluntary Arrangement (IVA)	A voluntary means of repaying creditors some or all of what they are owed. Once approved by 75% or more of creditors, the arrangement is binding on all. IVAs are supervised by licensed Insolvency Practitioners.
Standard Industrial Classification (SIC 2007)	Used in classifying business establishments and other statistical units by the type of economic activity in which they are engaged. Further information can be found on the Office for National Statistics website.