Over 11,000 people enter insolvency in September in 7% rise on same month last year: "Thousands are drowning in debt"

OVER 11,000 people entered insolvency in September in a 7% rise on last year's figure for the same month with experts saying “thousands are drowning” in debt.

In September 2025, 11,101 individuals entered insolvency in England and Wales, according to The Insolvency Service. 

This was 3% lower than in August 2025 but was 7% higher than in September 2024. 

The 3,985 Debt Relief Orders (DROs) registered in September 2025 was 77% higher than the long-term (2015 to 2024) monthly average of 2,252, although below the record high of 4,216 seen in August 2025. 

DRO numbers have been at record-high monthly numbers since the abolition of the upfront £90 fee in April 2024, with the 45,942 DROs in the past 12 months being nearly twice as high as the long-term annual average. 

There were 2,000 company insolvencies in September 2025, 2% lower than in August 2025 but 2% higher than in September 2024, according to a separate report from The Insolvency Service. 

September 2025 saw a lower number of compulsory liquidations than August 2025, but a similar number of Creditors' Voluntary Liquidation (CVLs).

Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, worries the figures will only get worse.

She added: "Personal insolvencies up 7% compared to last year says a lot about the state of the economy at present. There's every chance these figures could deteriorate further if the Government continues to pile fiscal pressure on households. 

"Rate cuts would help but they are not guaranteed given how stubborn inflation is improving. The number of debt relief orders is staggeringly high and a damning indictment of this country's economic health. Behind all these hard figures are real people and we shouldn't forget that."

Patricia McGirr, Founder at Burnley-based Repossession Rescue Network, said reform is needed to stop the rise in people going into debt.

She continued: "Let’s stop pretending this is good news just because insolvencies dipped by 3%. People aren’t suddenly better off, they’re just delaying the inevitable. The rise in DROs tells the real story: the cost-of-living crisis hasn’t gone away, it’s just moved into the paperwork. 

“Remove a £90 barrier and the floodgates open, because thousands were already drowning. For households and small businesses alike, this isn’t recovery. Until we stop treating debt like a moral failure and start fixing the broken systems that push people into it, we’ll keep counting the casualties every month.”

Kundan Bhaduri, Entrepreneur and Landlord at London-based The Kushman Group, said alarm bells should be ringing in the government.

He added: "Think of it, the 11,000 individual insolvencies last month is no statistical noise. It signals systemic pressure on household finances despite government claims of economic recovery. The surge in DROs to nearly double their historical average since fee abolition demonstrates how many people cannot even afford basic bankruptcy procedures today. 

"What makes these figures particularly troubling is their persistence alongside allegedly improving economic indicators. Company insolvencies running at 2,000 monthly suggests the business environment remains hostile to smaller enterprises, with construction, retail, and hospitality bearing the brunt of cost pressures, late payments, and tighter lending conditions. 

"The 77 per cent spike in DROs itself should ring alarm bells for the Treasury. All this reflects not just policy failure on the part of the government but genuine financial desperation among those individuals and businesses who previously had no formal insolvency options."

Clive Bonny, MD at Strategic Management Partners, said the figures on companies going insolvent are troubling.

He added: “Alongside the increasing number of registered company insolvencies is the much larger hidden number of unregistered small enterprises who cease trading. 

"Without these earlier stage businesses growing and creating jobs then UK tax receipts will continue to fall and all surviving taxpayers pay this price. Government policymakers have withdrawn almost all funded support for small grants. Yet these small grants create the seeds which grow more jobs. 

"The UK now has over one million unemployed aged 16-24 on benefits each costing taxpayers £9k to £16k a year. Many would be entrepreneurs who could start a new business with £2k support. Can Rachel Reeves and government policymakers do the maths?”