Latest monthly figures from the Insolvency Service for England & Wales have indicated that personal insolvency figures in July 2024 remained at similar levels to June 2024, but were 24% higher than in July last year at 10,524.
The personal insolvencies consisted of 634 bankruptcies, 4,163 debt relief orders (DROs) and 5,727 individual voluntary arrangements (IVAs).
The last four months have all seen the highest monthly numbers of DROs since their introduction. This comes after the removal of the £90 administration fee to obtain a DRO from 6th April 2024 and the expanding eligibility criteria for DROs in June 2024. The number of IVAs registered in July was similar to June 2024 and 12% higher than in July 2023.
IVA numbers over the past year have been lower than during 2022, which saw a record high annual number. The 5,727 IVAs (after seasonal adjustment) registered in July 2024 was 12% higher than in July 2023 and 4% higher than in June 2024.
In July 2024, there were 4,163 DROs, 5% lower than the record high monthly numbers seen in June 2024. However, the number of DROs in July 2024 was 97% higher than the long-term (2014 to 2023) monthly average of 2,114, and levels remain much higher than at any other point since their introduction.
The number of bankruptcies in July 2024 was 634, which is similar to numbers over the past 12 months.
There were 7,369 breathing spaces registered under the Debt Respite Scheme in July 2024. This is 5% lower than in July 2023. Of the 7,369 breathing space registrations, 7,244 were Standard breathing space registrations and 125 were Mental Health breathing space registrations. Between the start of the scheme in May 2021 and 31st July 2024, StepChange Debt Charity registered 61% of breathing spaces.
Tim Cooper, President of R3, the UK’s insolvency trade body, and a partner at Addleshaw Goddard LLP, said “When it comes to personal insolvencies, the figures published today show a decrease from last month, an increase from July 2023, and a decrease from the July before the pandemic. The monthly fall is mainly driven by decreases in Debt Relief Orders (DRO) and Bankruptcies, while the number of people entering an Individual Voluntary Arrangement (IVA) has risen this month, and changes in DRO eligibility and the removal of its administration fee have also influenced the change in take up of this process compared to a year ago.
“It’s also worth noting that Breathing Space numbers have increased compared to June 2024, which highlights the ongoing debt challenges individuals in England and Wales are facing when you consider them alongside the slight fall in personal insolvencies we’ve seen month-on-month, as the combined figures for both processes are higher than they were in June of this year.
“The cost of living remains a concern, but consumers are cautiously optimistic, and are spending more on experiences while at the same time remaining wary of making major purchases.”
Steve Vaid, Chief Executive of the Money Advice Trust, the charity that runs National Debtline, said “2024 remains a record year for the number of people registering for a Debt Relief Order, a clear sign of the extreme financial pressure many households are under.
“DROs offer a safe route out of debt for people on the lowest incomes, and the recent removal of the £90 fee means that more people in financial difficulty are able to access this option. Not everyone experiencing difficulty is eligible for a DRO, but contacting a free, impartial debt advice service is the most important first step for anyone who is worried about their finances.”
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