UK Insolvency Statistics 2026: IVA, DRO and Bankruptcy Data

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What is individual insolvency?

Individual insolvency is a formal legal process for people who cannot pay their debts. In England and Wales, there are three main types: individual voluntary arrangements (IVAs), debt relief orders (DROs) and bankruptcy. Each has different eligibility rules, costs and consequences. These statistics cover only formal insolvency procedures -- informal arrangements such as debt management plans are not included.

Individual insolvency trend: monthly breakdown March 2025 to March 2026

The chart below shows the monthly breakdown of individual insolvencies in England and Wales by type from January 2025 to March 2026. DROs have shown the steepest rise -- reaching a record high in March 2026 -- reflecting an increase in the number of people with low incomes and modest debts who cannot service what they owe. IVA numbers have also risen above 2025 averages. Bankruptcies remain comparatively low, partly reflecting the higher application cost relative to DROs.

Long-term insolvency trend: 2009 to 2025

Individual insolvencies peaked following the 2008-09 financial crisis, reaching over 134,000 in 2009. Numbers then declined steadily through the 2010s before rising again from 2017 as IVA volumes grew. The COVID-19 period saw a temporary fall as government support measures reduced financial pressure on households. Since 2022, insolvencies have risen sharply as cost-of-living pressures, rising mortgage rates and the end of support schemes have increased financial stress across the UK.

What is a Debt Relief Order (DRO)?

A DRO allows people with low income, low assets and debts under £30,000 to have their debts written off after a 12-month moratorium period. During the moratorium, creditors cannot pursue the debt. If the person's circumstances do not improve during the 12 months, the debts are written off at the end. A DRO costs £90 to apply for and must be applied for through an authorised debt adviser -- it cannot be applied for directly.

DROs were introduced in 2009 as a lower-cost alternative to bankruptcy for those who could not afford the £680 bankruptcy application fee. The record high in March 2026 (4,523 DROs) reflects both the broadening of DRO eligibility criteria -- the debt threshold was raised from £20,000 to £30,000 in June 2024 -- and the sustained financial pressure on low-income households from energy bills, food inflation and reduced benefit support.

What is an IVA?

An Individual Voluntary Arrangement (IVA) is a formal agreement between a debtor and their creditors to repay a proportion of their debts over a fixed period, typically five to six years. IVAs are arranged by licensed insolvency practitioners and require approval from creditors representing at least 75% of the debt by value. Once approved, the IVA is legally binding on all creditors, including those who voted against it. At the end of the IVA, any remaining debt is written off.

IVAs are the most common form of individual insolvency, accounting for 7,075 of the 12,252 insolvencies in March 2026. They are widely used by people with regular income who have debts typically above £6,000. The Financial Conduct Authority introduced a ban on debt packagers receiving remuneration for IVA referrals in 2023, which contributed to a fall in IVA numbers in 2023 -- but volumes have since recovered.

Breathing Space -- what it is and why numbers have fallen

The Debt Respite Scheme (Breathing Space) gives people in serious debt a 60-day period during which creditors cannot take enforcement action and most interest and charges are frozen. This gives breathing space to seek debt advice and enter a formal debt solution. There were 5,175 Breathing Space registrations in March 2026 -- 36% lower than March 2025. The fall reflects a change in suitability criteria by the largest money advice group by case volumes, which reduced the number of clients referred into the scheme from December 2025 onwards.

Frequently asked questions

What is the difference between an IVA, a DRO and bankruptcy?

An IVA is an agreement to repay part of your debts over five to six years -- suitable for people with regular income and debts typically above £6,000. A DRO writes off debts under £30,000 after a 12-month moratorium -- suitable for people with low income (under £75/mo disposable) and assets under £2,000. Bankruptcy writes off most debts immediately but can result in assets including property being sold -- suitable for people with larger debts or no assets to protect. All three appear on your credit file for six years.

How many people go insolvent in the UK each year?

In the 12 months to March 2026, 26.4 per 10,000 adults in England and Wales entered a formal insolvency procedure -- equivalent to one in every 379 adults. In absolute terms, approximately 120,000 to 135,000 individual insolvencies are registered in England and Wales each year. Scotland and Northern Ireland report separately: Scotland recorded 1,896 individual insolvencies in Q4 2025, while Northern Ireland recorded 412 in Q1 2026.

Why are DRO numbers at a record high?

Two factors are driving the rise in DROs. First, the eligibility threshold was raised in June 2024 -- the maximum debt level increased from £20,000 to £30,000, the asset limit increased from £1,000 to £2,000, and the disposable income limit increased from £50 to £75 per month. This brought more people into eligibility. Second, sustained cost-of-living pressures -- energy bills, food inflation and the end of COVID-era support -- have pushed more low-income households into financial difficulty. DROs are the lowest-cost formal insolvency route at £90, making them the most accessible option for people with limited resources.

Where is the next insolvency statistics release?

The Insolvency Service publishes monthly insolvency statistics on a rolling basis. The next release covering April 2026 data is scheduled for 19 May 2026. Statistics are published at 9:30am on the release date at gov.uk -- individual insolvency statistics releases.