Risky futures as insolvency jumps by 10%

Sunday, June 21, 2026

Personal insolvencies in England and Wales increased by 10% in May compared to last year, driven mainly by higher debt relief orders and individual voluntary arrangements. Despite a decline in company insolvencies, persistent economic pressures such as rising costs and limited financing continue to challenge both households and businesses.

The number of personal insolvencies in England and Wales rose by 10% in May compared to the same month last year, according to data from the Insolvency Service. A total of 11,223 individual insolvencies were registered in May, marking a 2% increase from April’s figures.

The breakdown of May’s personal insolvencies included 656 bankruptcies, 4,191 debt relief orders (DROs), and 6,376 individual voluntary arrangements (IVAs). While DRO registrations edged up slightly from April, they remained below the record levels observed in March. The increase in DROs in recent years has been attributed to expanded eligibility criteria. IVAs in May were also marginally higher than the previous month and consistent with average numbers recorded over the past year. Bankruptcy figures stayed roughly half of what they were before 2020 and comparable to May of the previous year.

In contrast, the number of Breathing Space registrations, which provide individuals with temporary relief from creditor action, declined sharply. There were 4,817 such registrations in May, representing a 38% drop compared to May 2025.

On the corporate side, company insolvencies fell to 1,868 in May, decreasing 10% from April and 16% from the same month last year.

Experts noted ongoing strain within the business community despite some month-to-month improvements. Robert Young, restructuring and insolvency partner at Azets, highlighted persistent challenges including geopolitical tensions, rising costs, political uncertainty, limited access to affordable financing, and pressure from creditors seeking overdue payments. He cautioned that unless conditions improve and financial burdens ease, demand for professional advice and support is expected to stay elevated as trading difficulties continue to affect firms.

Giuseppe Parla, restructuring and insolvency director at Menzies LLP, pointed to factors such as higher energy, labor, oil, and food prices weighing on household budgets. He suggested many businesses are questioning whether short-term solutions will suffice amid a growing array of financial pressures.

The mixed trends underscore a complex economic environment where both individuals and companies face significant obstacles managing debt and financial stability.