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Insolvency data shows "the economy is in crisis"

ended 21. January 2025

After seasonal adjustment, 10,050 individuals entered insolvency in England and Wales in December 2024, according to data published this morning. This was similar to November 2024 and 23% higher than in December 2023. The number of individual insolvencies registered in 2024 as a whole was 117,947, 14% higher than the 103,434 in 2023. This includes Debt relief orders (DROs) highest annual level since their introduction in 2009, following the abolition of the upfront £90 fee in April 2024, and expansion of the DRO eligibility criteria in June 2024.

Meanwhile, after seasonal adjustment, official data published today shows the number of registered company insolvencies in England and Wales was 1,838 in December 2024, 6% lower than in November 2024 (1,962) and 14% lower than the same month in the previous year (2,139 in December 2023). The number of company insolvencies remained much higher than those seen both during the COVID-19 pandemic and between 2014 and 2019. In 2024, there were 23,872 registered company insolvencies comprising 18,840 creditors’ voluntary liquidations (CVLs), 3,230 compulsory liquidations, 1,597 administrations, 202 company voluntary arrangements (CVAs) and three receivership appointments. The total number of company insolvencies in 2024 was 5% lower than in 2023, which saw the highest annual number since 1993.

Newspage asked financial and business experts for their insights, below.

8 responses from the Newspage community

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Darryl DhofferVerified
Founder at The Mortgage Geezer
The latest insolvency figures paint a grim picture of a nation teetering on the edge of a financial precipice. While a slight dip in company insolvencies offers a glimmer of hope, the surge in individual insolvencies is a stark warning sign of a deepening economic crisis. The 23% year-on-year increase in individual insolvencies in December is a chilling statistic. This reflects a desperate reality for countless families struggling to stay afloat amidst a perfect storm of rising living costs, stagnant wages and a cost-of-living crisis that shows no signs of abating. The government's own measures, such as the abolition of the DRO fee, while well-intentioned, merely highlight the sheer scale of the problem. People are drowning in debt and the safety nets are fraying.
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Katy EatentonVerified
Mortgage & Protection Specialist at Eatenton Finance
The economy is in crisis. If you needed proof of the immense strain household finances are under, this is it. For individual insolvencies in December to be up almost a quarter relative to the previous year is a stark reminder that the cost of living crisis has not abated and reflects the impact of higher interest rates. Worst of all, the full effects of the Budget have yet to feed through. The data could get a lot worse before it gets better.
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Patricia McGirrVerified
Founder at Repossession Rescue Network
Isn't it brilliant? The government's big solution to the cost-of-living crisis was to make going broke more affordable. Scrapping the £90 DRO fee? That's their idea of economic support, maybe next they'll be offering "two-for-one deals" on bankruptcies. These figures are a stark wake-up call. Individual insolvencies rocketed up 23% since last December, with 2024's total hitting a jaw-dropping 117,947 cases. The surge in Debt Relief Orders to record levels since their 2009 introduction sparked by April's fee removal, tells us Britain's financial health is on end-of-life care. While company insolvencies dipped 14% year-on-year this December, let's not kid ourselves, these numbers are still alarmingly high compared to pre-pandemic levels. Behind the data is a tale of shattered dreams and lost livelihoods. My inbox is flooded with business owners facing impossible choices. We need urgent action, not more government bright ideas about making it cheaper to fail.
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Michelle LawsonVerified
Director at Lawson Financial
The individual insolvency figures are clearly echoing the fact that there is still no improvement in people's finances. The reckless Budget will only see these figures continue to worse as people feel that the have reached the end of the road. Something needs to be done quickly to reverse these statistics and put money back into the pockets of households and small businesses otherwise the debt to the country will only increase further as these people naturally fall into Government financial support.
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Ben PerksVerified
Managing Director at Orchard Financial Advisers
Companies seem to be showing resilience and we will find out over the next few months if the Budget alters this declining trend. It’s encouraging to see that company insolvencies have reduced slightly, but the rise in individual insolvency is shocking and upsetting to see. Further evidence of the struggle is that joblessness is on the rise, as revealed earlier today. A perfect storm of terrible data that shows how turbulent times are and the strain that people are facing. Alarm bells should be ringing in Number 10. They need to get a grip and halt the rise in individual insolvencies and joblessness. People are crying out for intervention.
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Emma JonesVerified
Managing Director at Whenthebanksaysno.co.uk
The government needs to take a long and hard look at this data. Households around the country are struggling and there is no relief on the horizon. For many people, it's brutal out there and it's important to remember that behind this data are real lives.
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Riz MalikVerified
Independent Financial Adviser at R3 Wealth
While the ticker tape is being swept up over the other side of the pond, unfortunately, we have nothing to celebrate. The UK's economic outlook is grim and this data just emphasises how hard it is to do business in the UK. The budget could have provided a lifeline but, if anything, made the environment even harsher. The outlook for small businesses is grim.
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Graham CoxVerified
Director at Bridging Hub
Personal insolvencies were a shocking 23% higher than the same month a year ago, highlighting how cost of living pressures, including more expensive interest rates on credit cards, loans, and mortgages, as well as rapidly rising private rents, have all taken their toll on people's finances. Debt Relief Orders, taken out by those on low incomes, have also increased significantly. Unfortunately, until living standards improve, it's difficult to see things changing for the better.