The number of people going financially insolvent across England and Wales was 25% higher in November this year than in the same month in 2023, according to Insolvency Service figures.
Some 10,012 people entered insolvency in England and Wales in November 2024, which was also a 12% jump when compared with the previous month.
The insolvencies were made up of 589 bankruptcies, 3,693 debt relief orders (DROs) and 5,730 individual voluntary arrangements (IVAs).
DRO numbers have been at record levels in recent months after the removal of a £90 administration fee to obtain one, from April 6 2024.
While DRO numbers have recently been at record highs, bankruptcies have been slightly lower than 2023, the report said.
Overall, monthly numbers of IVAs so far in 2024 have been slightly higher than 2023’s six-year annual low.
In addition to formal insolvencies, 7,626 breathing space registrations under the Debt Respite Scheme were recorded in November 2024. This is 2% higher than in November 2023.
Of the total, 7,506 were standard breathing space registrations and 120 were mental health breathing space registrations.
The Debt Respite Scheme gives people in problem debt, legal protections from their creditors.
A standard breathing space gives legal protections from creditor action for up to 60 days.
A mental health crisis breathing space lasts as long as the person’s mental health crisis treatment, plus 30 days.
Tim Cooper, president of insolvency and restructuring trade body R3 said: “Demand for personal insolvency support is very much still being driven by cost-of-living issues.
“People who were struggling but getting by are now turning to an insolvency process in increasing numbers as ongoing rising prices have pushed their expenses to an unmanageable level.
“With Christmas just around the corner, many are looking at how they can cut their spending on both essentials and luxury items as they prepare for the festive season and the spending associated with it.
“We urge anyone who is worried about their financial situation to seek advice as early as possible.”
Today’s gloomy update on company insolvencies underlines the difficult tightrope that many businesses currently need to navigate
The number of registered company insolvencies in England and Wales was 1,966 in November 2024, 13% higher than in October 2024 and 12% lower than the same month in the previous year.
Company insolvencies remained much higher than those seen both during the Covid-19 pandemic and between 2014 and 2019, the Insolvency Service said.
Mark Ford, a partner in the restructuring and recovery team at professional services firm Evelyn Partners, said: “Today’s gloomy update on company insolvencies underlines the difficult tightrope that many businesses currently need to navigate.”
He added: “Unfortunately, as we head into 2025 businesses are unlikely to see the challenging trading conditions easing anytime soon.
“Business leaders from multiple industries have been vocal about the need to consider increasing prices or cutting jobs to remain competitive, given upcoming increases to employer national insurance contributions and the minimum wage.
“Those operating in labour-intensive sectors, such as hospitality and retail, will be most impacted by the tax hikes.
“Businesses in these industries will be hoping for a good final week of trading before Christmas to put them in good stead for the typically challenging start to a new year.”
John Cullen, business recovery partner at Menzies, said: “Despite inflationary pressures easing, retailers are running out of options to secure their bottom lines amid the growing popularity of ecommerce and a seemingly never-ending period of high costs.”
