UK Personal Debt in 2025: Record Highs, Rising Insolvencies & the Growing Need for Help
May 20, 2025The latest insolvency statistics from the Insolvency Service show personal insolvencies in England and Wales increased in April 2025, with more than 10,000 people entering a formal debt solution. The figures reflect ongoing financial pressures on households and further highlight the impact of recent regulatory and policy changes.
Headline Statistics – April 2025
- 10,012 individuals entered insolvency – up 8% on March 2025 and 4% on April 2024
- Breakdown by type:
- 5,586 IVAs (Individual Voluntary Arrangements) – up 9% month-on-month
- 3,837 DROs (Debt Relief Orders) – up 8% month-on-month
- 589 bankruptcies – down 6% month-on-month and 11% year-on-year
- One in every 417 adults entered insolvency in the 12 months to April 2025 (24.0 per 10,000 adults), up from one in 463 the previous year
What’s Driving the Numbers?
IVAs: A Gradual Rebound
IVAs rose to 5,586 in April – 9% higher than the previous month and 7% above April 2024. While this marks a modest increase, volumes remain below the record levels seen between 2018 and 2022. The sector continues to stabilise following 2023’s drop, which coincided with FCA restrictions on debt packager referral fees and tighter take-on rules introduced by professional bodies.
DROs: Accessibility Boost Continues to Drive High Uptake
DROs remained elevated, with April’s figure up 8% from March and 70% higher than the long-term monthly average. This continued strength reflects the abolition of the £90 application fee in April 2024 and expanded eligibility criteria introduced in June 2024. The volume of DROs registered over the last year is nearly double the annual average from 2015 to 2024.
Bankruptcies: A Continued Decline
At 589 cases, bankruptcies in April were at their lowest for the year so far. Numbers remain significantly below pre-2020 levels and reflect the declining use of bankruptcy as a primary insolvency route. Bankruptcies now represent just 6% of personal insolvencies, compared with 20% in 2015.
Shift in Insolvency Profile
In the 12 months to April 2025, the distribution of insolvency types has shifted notably:
- 55% IVAs
- 39% DROs
- 6% Bankruptcies
Compared to the same period ending April 2024, this marks a continued rise in DRO usage and a reduction in both bankruptcies and IVAs as proportions of total insolvencies.
Breathing Space Registrations
There were 7,273 Breathing Space registrations in April 2025 – down 5% year-on-year. Of these:
- 7,170 were Standard Breathing Spaces
- 103 were Mental Health Breathing Spaces
StepChange Debt Charity continues to lead in registrations, accounting for 60% of all Breathing Spaces since the scheme launched in May 2021.
Conclusion
April’s statistics reinforce the message that personal debt pressures remain acute. The sustained high levels of DROs suggest increased reliance on lower-income debt solutions, especially as changes in policy have removed key barriers to access. Meanwhile, IVAs are slowly regaining momentum, though they remain far below their recent peaks.
With inflationary pressures and living costs still squeezing households, demand for formal debt solutions is unlikely to recede in the near future. The current insolvency landscape highlights the critical importance of accessible, regulated advice and a balanced ecosystem of solutions.
For the full statistical release, visit the Insolvency Service website.
