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"Rise in Debt Relief Orders is a red flag revealing the level of financial distress among Brits"

ended 18. July 2025

THE rise in Debt Relief Orders is a red flag revealing the level of financial distress among Brits, financial experts have said, following new insolvency data published this morning. Another debt specialist said: “Debt Relief Orders are off the charts, and why wouldn’t they be when the upfront fee’s been scrapped?”

In June 2025, according to the Insolvency Service, 10,279 individuals entered insolvency in England and Wales. This was 2% higher than in May 2025 and 1% lower than in June 2024.

The 4,135 DROs registered in June 2025 was 84% higher than the long-term (2015 to 2024) monthly average of 2,252, although slightly below the record high of 4,187 seen in June 2024.

DRO numbers have been at record-high monthly numbers since the abolition of the upfront £90 fee in April 2024, with the 45,792 DROs in the past 12 months being nearly twice as high as the long-term annual average.

Meanwhile, the number of registered company insolvencies in England and Wales was 2,043 in June 2025, 8% lower than in May 2025 (2,230) and 16% lower than the same month in the previous year (2,430 in June 2024), according to further official data published today.

Monthly company insolvency numbers in the first six months of 2025 were slightly higher than the second half of 2024, but remain lower than the 30-year annual high seen in 2023. 

Harry Goodliffe, Director at HTG Mortgages, said: "The worrying stat here is the continued surge in Debt Relief Orders. The rise in DROs is a red flag revealing the level of financial distress among Brits, especially those with low incomes. The reality is, many are just hanging on by a thread. Unless we see a serious shift in economic direction, I expect things to get worse before they get better.

His views were shared by Patricia McGirr, Founder at Repossession Rescue Network, who said: "The real storm is in the personal numbers. Debt Relief Orders are off the charts, and why wouldn’t they be when the upfront fee’s been scrapped? It’s a lifeline for some, but it also signals just how many people are dangling by a thread. Company insolvencies might be down on paper, but that’s cold comfort for the directors who feel like they’re next.”

Dariusz Karpowicz, Director at Albion Financial Advice, agreed: “The massive surge in personal DROs tells the real story here. With numbers nearly double the long-term average, it's a stark reminder that whilst company insolvencies may be cooling off, ordinary people are still drowning in the cost-of-living crisis. When you scrap the £90 upfront fee, suddenly thousands more can access this lifeline, revealing just how many were previously suffering in silence. Behind the headline drop in company failures lies a more troubling reality: this feels less like genuine recovery and more like the calm before another storm.”

David Stirling, Director at Mint Mortgages & Protection, added: “DROs, boosted by the removal of the £90 fee in April 2024, reached 4,135 in June, nearly double the long-term average, showing that many were teetering on the brink and have now slipped. While business failures seem to have eased, household financial pressures remain elevated, and with inflation up and employment down, this week has given us a triple whammy of cruel data.”

Kate Underwood, Managing Director at Kate Underwood HR and Training commented: “June’s dip in company insolvencies is welcome breathing space, but it feels more like we’ve paused on the hill rather than reached the summit. On the HR hotline I’m still hearing from owners sweating over payroll, eye‑watering energy bills and customers who pay on “mañana” time. Many are plugging gaps with overdrafts or HMRC Time‑to‑Pay plans—not new profits.

"Record‑high Debt Relief Orders show households are under pressure, and that dents spending in retail and hospitality. Unless demand perks up and invoices get settled faster, I won’t be surprised if insolvency numbers creep back towards 2024 highs once VAT and self‑assessment bills land in the post. June’s fall is a breather—not a trend—so now’s the time to keep a hawk‑eye on cash and ask for help early."

Tony Redondo, Founder at Cosmos Currency Exchange, said "there’s always a time lag with this type of data, and it misses informal debt solutions and sectoral nuances. The anecdotal evidence on the ground is far more bleak, with businesses facing ongoing tax and inflation pressures, and clients tightening their belts amid a worsening jobs market. I expect insolvencies to rise in late 2025 due to rising costs and weak demand, especially in retail and hospitality.”

6 responses from the Newspage community

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Harry Goodliffe
Director at HTG Mortgages
These numbers might look slightly better on paper, but they don’t reflect the pain many households and businesses are still feeling. Company insolvencies may be dipping, but that’s likely down to timing and temporary relief, not a real recovery. The worrying stat here is the continued surge in DROs. The rise in DROs is a red flag for the level of financial distress among Brits, especially those with low incomes. The reality is, many are just hanging on by a thread. Unless we see a serious shift in economic direction, I expect things to get worse before they get better.
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Patricia McGirr
Founder at Repossession Rescue Network
Company insolvencies might be down on paper, but that’s cold comfort for the directors who feel like they’re next. Behind every drop in the data is a delay, not a rescue. Landlords are waiting to pounce, suppliers are pulling terms, and the breathing space is paper-thin. The real storm is in the personal numbers. Debt Relief Orders are off the charts, and why wouldn’t they be when the upfront fee’s been scrapped? It’s a lifeline for some, but it also signals just how many people are dangling by a thread. So, is the worst over? Or are we just in the eye of the hurricane, mistaking stillness for stability? Look at the SME credit squeeze, the creeping rent arrears, the creeping repossession threats – and ask yourself: is this recovery, or just a pause before the next wave? If this is calm, I’d hate to see the chaos.
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Dariusz Karpowicz
Director at Albion Financial Advice
The massive surge in personal DROs tells the real story here. With numbers nearly double the long-term average, it's a stark reminder that whilst company insolvencies may be cooling off, ordinary people are still drowning in the cost-of-living crisis. When you scrap the £90 upfront fee, suddenly thousands more can access this lifeline, revealing just how many were previously suffering in silence. Behind the headline drop in company failures lies a more troubling reality: this feels less like genuine recovery and more like the calm before another storm. With employment figures remaining patchy and inflation still biting hard, these personal insolvency numbers are probably the canary in the coal mine. Expect more difficult months ahead as the squeeze continues.
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Kate Underwood
Founder & Chief People Strategist at Kate Underwood HR and Training
June’s dip in company insolvencies is welcome breathing space, but it feels more like we’ve paused on the hill rather than reached the summit. On the HR hotline I’m still hearing from owners sweating over payroll, eye‑watering energy bills and customers who pay on “mañana” time. Many are plugging gaps with overdrafts or HMRC Time‑to‑Pay plans—not new profits.

What I’m seeing on the ground

Cash cushions are wafer‑thin; one late payment can wobble a whole month.

Fixed‑rate loans signed in the cheap‑money years are rolling over at hair‑raising rates.

Record‑high Debt Relief Orders show households are under pressure, and that dents spending in retail and hospitality.

Crystal ball for autumn
Unless demand perks up and invoices get settled faster, I won’t be surprised if insolvency numbers creep back towards 2024 highs once VAT and self‑assessment bills land in the post. June’s fall is a breather—not a trend—so now’s the time to keep a hawk‑eye on cash and ask for help early.

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David Stirling
Independent Financial Adviser at Mint Wealth
DROs, boosted by the removal of the £90 fee in April 2024, reached 4,135 in June, nearly double the long-term average, showing that many were teetering on the brink and have now slipped. While business failures seem to have eased, household financial pressures remain elevated, and with inflation up and employment down, this week has given us a triple whammy of cruel data.
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Tony Redondo
Founder at Cosmos Currency Exchange
There’s always a time lag with this type of data, and it misses informal debt solutions and sectoral nuances. It’s great that the June 2025 insolvency data shows company insolvencies 8% down from May 2025 and 16% down from June 2024, but slightly higher than late 2024, and individual insolvencies down 1% from June 2024 whilst DROs surged 84% above the long-term average, driven by the April 2024 fee abolition. The anecdotal evidence on the ground is far more bleak, with businesses facing ongoing tax and inflation pressures, with clients tightening their belts amid a worsening jobs market. I expect insolvencies to rise in late 2025 due to rising costs and weak demand, especially in retail and hospitality.