Latest Insolvency Data: Can We Fix A Broken System?

This morning at 0930, the latest insolvency statistics for England and Wales were released, and while the headlines point to a decline in insolvencies, the reality beneath the headline numbers is far bleaker. The quiet devastation of businesses and households continues, with record highs in Debt Relief Orders (DROs) and voluntary liquidations dominating the landscape.

We’re not seeing recovery, we’re seeing survival. Businesses are closing preemptively, households are drowning in mounting debt, and the cracks in the system are turning into chasms.

Here’s what the data reveals, why it matters, and how we can take action to stop the decline.

The Data: A Closer Look

Company Insolvencies

• 1,747 company insolvencies in October 2024, down 10% from September and 24% lower than October 2023.
• Breakdown: 1,445 were creditors’ voluntary liquidations (CVLs), where businesses proactively wind up operations rather than face compulsory liquidation.
• The rolling rate shows one in 186 companies entered insolvency in the past year, and while that’s below the 2008-09 peak, it’s still alarmingly high.

Personal Insolvencies

• 8,952 individuals entered insolvency last month—14% lower than September but consistent with October 2023.
• Debt Relief Orders (DROs) hit record highs, reflecting just how many individuals are unable to meet even modest financial obligations.
• Bankruptcy numbers remain at half of pre-2020 levels, not because people are better off, but because DROs and IVAs (Individual Voluntary Arrangements) have become the go-to solutions for those in financial distress.

For the full government statistics, you can read the official Company Insolvency report here.

For the full government statistics, you can read the official Individual Insolvency report here

What This Means for Businesses and Households

Businesses Are Giving Up

The dominance of CVLs shows that many businesses are closing voluntarily, not because they want to, but because they feel they have no choice.

Rising costs, higher interest rates, new tax and NI liabilities and a lack of confidence in the future are forcing owners to make hard decisions. These closures aren’t failures; they’re a reflection of a system that’s crushing the backbone of our economy.

Households Are at Breaking Point

The surge in DROs tells us that people are struggling more than ever. The removal of the £90 fee has made DROs more accessible, but it also reveals how many people can’t cope with even modest levels of debt. This isn’t about reckless spending; it’s about survival. Rising living costs, stagnant wages, and relentless tax hikes are leaving families with nowhere to turn.

The Underlying Issues

1. Rising Interest Rates: The Bank of England’s rate hikes have hit mortgages, loans, and business borrowing hard. What was manageable two years ago has become impossible for many.
2. Soaring Costs of Living: Inflation may be easing, but prices remain stubbornly high, and wages aren’t catching up. This squeeze is forcing households and businesses to dip into reserves they simply don’t have.
3. Tax Burdens: The Budget delivered little relief and plenty of pain, with tax hikes that hit small businesses and middle-income families hardest.  

Solutions: Where Do We Go From Here?

For Individuals

• Act Early: If you’re struggling with debt, don’t wait. Speak to a debt advisor or insolvency professional to explore options like DROs, IVAs, or even a Breathing Space scheme.
• Reframe the Narrative: Debt isn’t failure—it’s the reality for millions. Seeking help isn’t weakness; it’s a step toward reclaiming control.

For Businesses

• Seek Advice: Restructuring, administration, or even voluntary liquidation doesn’t have to mean the end. Speak to an expert to explore options before it’s too late.
• Control Cash Flow: Review your finances, renegotiate payment terms, and focus on essentials to keep your business afloat during tough times.

For Policymakers

It's hard to imagine that both previous and subsequent Governments have failed to see the impact policy has on financial markets and borrowing, yet this is the reality we all face.  The safeguards of the Covid pandemic are long since gone and yet we face mighty challenges now and for the forseeable future. 

• Cut Interest Rates: The Bank of England must act in December to ease the burden on households and businesses. Anything less risks tipping more people over the edge.
• Provide Meaningful Support: From tax relief to targeted grants, we need policies that stop punishing those already struggling and start creating real paths to recovery.

A Call to Action: Help Is Here

Whether you’re a business owner trying to stay afloat, a professional working in the business or property sector, or someone drowning in debt, the first step is to take action.

💡 For Property Professionals:
The Repossession Foundation Programme equips you with the skills to navigate this challenging market, support clients in distress, and find opportunities even in turbulent times. Learn more here.

💡 For Those in Debt:
You don’t have to face this alone. Contact us via our homepage today to explore your options and start taking control of your financial future.

Final Thoughts

The insolvency crisis isn’t about numbers, it's about people. Behind every statistic is a family, a business, or a dream on the verge of collapse. Until we stop tinkering at the edges and start addressing the root causes of debt and financial distress, we’ll continue to see the quiet devastation of lives and livelihoods.

It’s time to act with empathy, urgency, and bold solutions. Because if the system is broken, those trapped in it shouldn’t have to break too.

For the full government statistics, click here.