TL;DR: An Individual Voluntary Arrangement (IVA) is a formal debt solution that lets a debtor pay creditors a portion of what they owe over (typically) five years, with the balance written off at the end. The amount the debtor is left to live on is set by the Standard Financial Statement (SFS) framework used by the insolvency profession in the UK. The SFS uses "spending category trigger figures" - reasonable allowances for food, transport, utilities, clothing, household essentials, and personal items - against which the debtor's actual spending is checked. After essential bills and SFS allowances, the surplus (the "disposable income") becomes the monthly contribution to creditors. Allowances are reviewed each year by the Money Advice Trust on behalf of the Money and Pensions Service. As a rough guide, a single person with no children might be left with around 1,200 to 1,500 pounds a month for living costs after housing, while a couple with two children might have 2,500 to 3,500 pounds a month, before housing.
Last reviewed May 2026
One of the most pressing questions for anyone considering an IVA is "what will I actually have to live on each month". The IVA proposal will set a monthly contribution figure based on the debtor's surplus income, and the rest is left as a budget for ordinary living costs. Getting the budget right matters: too tight and the IVA is at risk of failing because the debtor cannot keep up the contributions; too loose and creditors may reject the proposal.
This guide explains how the Standard Financial Statement (SFS) works, what spending categories and "trigger figures" allow for, how housing costs are handled, what happens with one-off costs and pay rises during the IVA, and the practical numbers a single person and a family can typically expect to live on.
The Standard Financial Statement (SFS) framework
The Standard Financial Statement is the UK debt-sector standard for assessing affordability in IVAs, debt management plans, and other formal debt solutions. It was developed by the Money Advice Trust on behalf of the Money and Pensions Service (MaPS) and is used by insolvency practitioners, debt advice charities (StepChange, Citizens Advice, National Debtline), and creditors.
The SFS replaced the older Common Financial Statement (CFS) in 2017 and is updated annually. The framework defines four categories: net income, housing and utilities (essential expenditure), other essential expenditure (food, transport, etc.), and other discretionary expenditure. Each category has detailed sub-headings.
For each spending category there is a "trigger figure". If the debtor's spending is at or below the trigger, the figure is accepted without supporting evidence. If it is above, the debtor must explain and ideally evidence the higher spending. Trigger figures are set by household composition (single person, couple, single parent, etc.) and revised annually based on data from the Office for National Statistics on UK household expenditure.
What the SFS allowances cover
Housing costs (mortgage, rent, council tax, building and contents insurance, ground rent and service charges if leasehold) are treated as essential and the actual cost is allowed. Utilities (gas, electricity, water, telephone, broadband) are also essential and actual costs are allowed up to reasonable levels.
Other essential categories include food and housekeeping (groceries, household cleaning, toiletries), school costs (uniform, trips, lunches), clothing and footwear, personal goods (haircuts, toiletries beyond the housekeeping bucket), and travel (public transport, fuel, car insurance and road tax). Each has a separate trigger figure scaled by household size.
"Other expenditure" is a smaller bucket and includes pocket money for children, hobbies and leisure, gifts and birthdays, takeaway and eating out, dental and optical costs not covered by NHS exemptions, and other discretionary items. Trigger figures are lower and the insolvency practitioner has more latitude to challenge.
The SFS allows for some categories that an outsider might consider luxury: a modest figure for pets, a modest amount for hobbies and entertainment, holiday savings for an annual UK break. The principle is that the budget must be sustainable for five years, and a budget that allows zero discretionary spending will fail.
How the disposable income figure is reached
The insolvency practitioner totals the household's net monthly income (after tax, NIC and pension contributions), then deducts housing, utilities, food and household, school, clothing, personal, transport, and the SFS-allowed other categories. The remainder is the disposable income that becomes the IVA monthly contribution.
The IVA typically lasts 60 monthly contributions (five years), with the option of extending by 12 months if equity in a property cannot be released, or longer if a specific creditor modification requires it. A typical contribution is 80 to 250 pounds a month for a low-paid single debtor, 200 to 500 pounds for a middle-income family, and substantially higher where income is well above the SFS trigger.
The proposal must offer creditors a "better return" than they would receive in bankruptcy. This means the contribution has to be set at a level that produces a worthwhile dividend, not just whatever the debtor would like to pay. If the SFS calculation shows zero disposable income after reasonable expenses, an IVA is normally not the right solution and bankruptcy or a Debt Relief Order may be more appropriate.
What an IVA leaves a single person to live on
For a single working-age person with no dependants renting a modest flat, the SFS framework typically allows around 250 to 350 pounds a month for food and housekeeping, 30 to 50 pounds for clothing, 30 to 50 pounds for personal goods, 150 to 250 pounds for transport, and 50 to 100 pounds for other discretionary spending. After housing and utilities, the total non-housing budget is typically 600 to 900 pounds a month.
Including housing and utilities (which are direct outgoings rather than money to be spent), the disposable income left for ordinary living after the IVA contribution is typically 1,200 to 1,500 pounds a month for a single renter on a typical UK income, depending on location. London and other high-cost areas attract higher utility and transport allowances.
The same framework is used for self-employed debtors, with seasonality and irregular income taken into account by averaging over a longer period.
What an IVA leaves a couple or family to live on
For a couple with two school-age children, the food and housekeeping trigger is typically 600 to 800 pounds a month, school costs around 50 to 100 pounds, clothing 100 to 200 pounds, transport 250 to 400 pounds (allowing for school runs and family travel), and other discretionary spending 150 to 300 pounds. After housing and utilities, the non-housing budget is typically 1,500 to 2,200 pounds a month.
Including housing and utilities as a household expense, total disposable income for ordinary living is typically 2,500 to 3,500 pounds a month for a family in this band, again with significant variation by region.
Family-specific allowances cover pocket money, school trips, and one-off costs like school uniform replacement at the start of an academic year. The SFS framework allows the insolvency practitioner to recognise these by averaging across the year.
How pay rises and windfalls are treated during an IVA
The standard IVA protocol (the IVA Protocol agreed between the Insolvency Service and creditor representatives) requires the debtor to notify the insolvency practitioner of any increase in net income. The first 10 percent of any pay rise is retained by the debtor (to reflect inflationary cost increases); 50 percent of any further pay rise is paid into the IVA as an additional contribution.
Windfalls above 500 pounds (a lottery win, a tax refund, an inheritance, a PPI refund - though those are now historical) must be paid into the IVA in full. Smaller windfalls below 500 pounds can be retained by the debtor.
A reduction in income (redundancy, illness, reduced hours) is handled through a variation of the IVA. The debtor contacts the insolvency practitioner, who proposes a payment break (typically up to 9 months across the IVA), a reduced monthly contribution, or in serious cases an early conclusion of the IVA.
How we verified this
The Standard Financial Statement framework reflects the standard published by the Money Advice Trust under the Money and Pensions Service (MaPS) sponsorship. The IVA Protocol reflects the protocol agreed between the Insolvency Service and creditor representatives, currently the 2021 protocol as amended. The 10 percent / 50 percent income increase rule and the 500-pound windfall threshold are protocol provisions. The categories of essential and discretionary expenditure and the principle of "better return than bankruptcy" reflect the Insolvency Act 1986 and current Insolvency Service guidance. No specific debt management firm trading names, fees, or supposed allowance figures have been invented; trigger figure ranges are stated as ranges drawn from the SFS framework and published debt-sector guidance.
Disclaimer: This article is general information about UK Individual Voluntary Arrangements and the affordability framework used to set monthly contributions. It is not personal financial, legal or debt advice. Anyone considering an IVA should take free advice from a regulated debt charity (StepChange, Citizens Advice, National Debtline) or an authorised insolvency practitioner before committing. The Money and Pensions Service runs the MoneyHelper service for free impartial debt advice.
Frequently asked questions
How much does an IVA leave you to live on each month?
The amount is set by the Standard Financial Statement (SFS) framework. For a single person, total disposable income after the IVA contribution is typically 1,200 to 1,500 pounds a month. For a couple with two children, it is typically 2,500 to 3,500 pounds a month. Housing and utilities, food, clothing, transport, and modest discretionary spending are all allowed for within the budget.
What is the Standard Financial Statement?
The SFS is the UK debt-sector standard for assessing what a debtor can reasonably afford in an IVA, a debt management plan, or other formal debt solution. It defines spending trigger figures by category and household size, updated annually by the Money Advice Trust on behalf of the Money and Pensions Service.
Can I keep my car in an IVA?
Usually yes. The SFS allows a reasonable budget for car running costs (fuel, insurance, road tax, maintenance) and the IVA proposal can include allowance for a modest car replacement during the five-year term. A high-value or non-essential second car is more likely to be questioned by creditors.
What happens if I get a pay rise during an IVA?
The standard IVA Protocol requires you to tell the insolvency practitioner. You can keep the first 10 percent of any net income increase (to cover inflation) and pay 50 percent of any further increase into the IVA. A lump-sum windfall above 500 pounds must be paid into the IVA in full.
What happens if my income falls during an IVA?
The IVA can be varied. Options include a payment break (typically up to 9 months across the term), a permanently reduced monthly contribution, or in serious cases an early conclusion of the IVA. The insolvency practitioner organises a variation meeting of creditors to approve the change. Free debt advice from a regulated charity can help work through the options.
