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Debt relief orders in UK at record levels: “It isn’t a canary in a coal mine for Rachel Reeves, it’s a full-blown funeral procession”

ended 19. August 2025

THE number of debt relief orders (DROs) in the UK is at record levels as experts warn "it isn’t a canary in a coal mine for Rachel Reeves, it’s a full-blown funeral procession”.

The number of DROs being issued in July 2025 remained similar to the record high levels seen since April 2024, new figures from The Insolvency Service show. 

In July 2025, 10,515 individuals entered insolvency in England and Wales. This was similar to levels in June 2025 and July 2024.

The individual insolvencies consisted of 599 bankruptcies, 4,001 DROs and 5,915 individual voluntary arrangements (IVAs). 

In the 12 months ending in July 2025, one in 413 adults in England and Wales entered insolvency (at a rate of 24.2 per 10,000 adults). 

This is higher than the rate of 22.6 per 10,000 adults (one in 442) who entered insolvency in the 12 months ending 31 July 2024.

Oli Garnett, Co-Founder at Bristol-based Something Familiar, issued a terrifying warning for the economy.

He said: "If record debt relief orders are 'normal', then so is living off Pot Noodles and payday loans. This isn’t a canary in a coal mine for Rachel Reeves, it’s a full-blown funeral procession. 

“One in 413 adults hitting insolvency isn’t a quirky stat, it’s proof the economy’s running on fumes. Bankruptcy is down only because people can’t even afford to go bust properly. Call it what you want: resilience, stability, but the reality is Britain’s skint, and papering over it with record DROs is like slapping a smiley face on a sinking ship.”

David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth Ltd, added: “Our chancellor seems utterly blindfolded claiming economic growth, when all this evidence shows that the general public are facing a norm of debt relief orders. Given these statistics, DROs are fast becoming less of a safety net and more of a national past time.”

Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages, said there was worse to come

He said: “These figures are signwriting from a plane that the economy is broken and many individuals, after trying everything, including borrowing to get through, have finally run out of road and need to go into an Individual Voluntary Arrangement or Debt Relief Order and surrender. The figures certainly do not give confidence on future growth, so the trend would indicate there is still worse to come.”

Michelle Lawson, Director at Fareham-based Lawson Financial, added: “If you keep spinning the truth you end up believing it yourself. Rachel Reeves' demolition of the economy and household finances tells a different story when you see statistics like this. 

"Arguably people are taking out more debt than they can manage but you have to look at why and deal with the root cause. Sad desperate figures which show no signs of recovery.”

5 responses from the Newspage community

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Oli Garnett
Co-Founder at Something Familiar.
If record debt relief orders are 'normal', then so is living off Pot Noodles and payday loans. This isn’t a canary in a coal mine for Rachel Reeves, it’s a full-blown funeral procession. One in 413 adults hitting insolvency isn’t a quirky stat, it’s proof the economy’s running on fumes. Bankruptcy is down only because people can’t even afford to go bust properly. Call it what you want: resilience, stability, but the reality is Britain’s skint, and papering over it with record DROs is like slapping a smiley face on a sinking ship.
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David Stirling
Independent Financial Adviser at Mint Wealth
Our chancellor seems utterly blindfolded claiming economic growth, when all this evidence shows that the general public are facing a norm of debt relief orders. Given these statistics, DROs are fast becoming less of a safety net and more of a national past time.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
These figures are signwriting from a plane that the economy is broken and many individuals, after trying everything, including borrowing to get through, have finally run out of road and need to go into an Individual Voluntary Arrangement or Debt Relief Order and surrender. The figures certainly do not give confidence on future growth, so the trend would indicate there is still worse to come.
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Tony Redondo
Founder at Cosmos Currency Exchange
The record-high DROs signal persistent household financial stress, particularly among lower-income groups, but the shift from bankruptcies to DROs/IVAs suggests people are managing debt through structured arrangements rather than total collapse. Beyond pure economic weakness, other factors, including post-pandemic employment/cost changes, increased DRO awareness, and different debt types making DROs more suitable, may be at play. For Reeves, these figures show real household stress requiring policy attention, but also indicate the financial system is channelling distress through managed processes rather than chaotic defaults. The key question is whether this reflects temporary adjustment or deeper structural problems, and if anyone in government is paying attention.
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Michelle Lawson
Director at Lawson Financial
If you keep spinning the truth you end up believing it yourself. Rachel Reeves' demolition of the economy and household finances tells a different story when you see statistics like this. Arguably people are taking out more debt than they can manage but you have to look at why and deal with the root cause. Sad desperate figures which show no signs of recovery.