Personal insolvencies surge 30% as debt relief orders hit record high

The number of people facing financial insolvency in England and Wales rose sharply in March, with official figures showing a 30 per cent year-on-year increase and a record number of applications for debt relief orders.

Data published by the Insolvency Service shows there were 12,252 personal insolvencies recorded last month, up from the same period a year earlier and 3 per cent higher than in February.

Personal insolvency comprises bankruptcies, individual voluntary arrangements (IVAs), and debt relief orders (DROs), with the latter reaching unprecedented levels.

In March, 4,523 debt relief orders were registered, the highest monthly total since their introduction in 2009.

The figure surpassed the previous record of 4,301 recorded only a month earlier, in February 2026.

Officials said the rise in DRO usage reflects successive changes to eligibility rules and administrative processes, including expanded criteria introduced in recent years, the removal of a £90 application fee in April 2024, and the establishment of additional processing hubs designed to streamline applications.

Alongside DROs, there were 7,075 IVAs and 654 bankruptcies recorded during the month, indicating continued pressure on household finances despite broader efforts to support debt restructuring.

Separately, the number of Breathing Space registrations—which provide temporary protection from creditor action while individuals seek debt advice—fell by 36 per cent year-on-year to 5,175.

The Insolvency Service also reported 2,022 company insolvencies in March, up 7 per cent on February and broadly in line with levels a year earlier. The rise was largely attributed to a wave of administrations affecting more than 100 connected firms in the real estate sector.

While company insolvency levels remain within recent historical norms, the sustained rise in personal insolvency is likely to fuel concerns about household resilience amid ongoing cost pressures and elevated borrowing costs.
Giuseppe Parla, restructuring and insolvency director at Menzies LLP, said: “Ongoing tensions in the Middle East are driving up energy and fuel costs, disrupting supply chains, and keeping inflation stubbornly above the Bank of England’s 2% target.”