One in 360 adults in England and Wales entered insolvency in the 12 months to the end of July, according to Insolvency Service statistics published on 18 August, which also show 11,926 people entering insolvency in July alone, 14 per cent more than in July 2025.
For anyone who works for themselves, the monthly release is missing a regular section. The Insolvency Service said it had omitted its breakdown of bankruptcies by self-employment status and industry because of delays in recording trader status after it moved to a new case management system on 1 November 2025. The sections “have been removed until the required data is available”, the agency said in its commentary on the July figures.
The rolling 12-month insolvency rate stood at 27.8 per 10,000 adults, up from 24.3 per 10,000, or one in 412, a year earlier, the Insolvency Service said.
IVAs drive the increase
Individual voluntary arrangements accounted for 7,442 of July’s cases, 27 per cent more than in July 2025 and 1 per cent more than in June, according to the statistics. An IVA is a deal between a person who cannot pay their debts and their creditors, used as an alternative to bankruptcy. Leaving aside December 2025, when a backlog of earlier cases was cleared, it was the highest monthly IVA figure since November 2022.
Across January to July 2026, IVA numbers ran 14 per cent above the 2025 monthly average, the Insolvency Service said, although they remain below the annual totals recorded between 2018 and 2022. The peak years came before the Financial Conduct Authority banned debt packagers from taking referral fees for introducing customers to IVA firms in June 2023.
There were 664 bankruptcies in July, 8 per cent more than a year earlier. Of those, 532 followed an application by the debtor, up 20 per cent on July 2025, while 132 were started by a creditor’s petition, down 23 per cent. Over the past 12 months, 78 per cent of bankruptcies came from debtors’ own applications, compared with 73 per cent in the previous 12 months, the Insolvency Service said.
Debt relief orders, which let people with debts under £50,000, few assets and little spare income write off what they cannot pay, fell 4 per cent on July 2025 to 3,820. Since the fee for a DRO was removed in April 2024, monthly numbers have been higher than at any point since the orders began in 2009, according to the agency.
Registrations under the breathing space scheme, which shields people from creditors for a limited period while they take debt advice, fell 38 per cent year on year to 5,248. The Insolvency Service linked the drop to StepChange, the largest provider by case numbers, updating its suitability criteria in November 2025.
Sonia Jordan, president of the insolvency and restructuring trade body R3 and a partner at Knights, said the 14 per cent annual rise underlined “the continued pressure on household finances”.
“Many households continue to struggle with debt and there is a clear need for effective support and breathing space,” she said. “Government support such as the £150 energy bill discount and the freeze on bus fares will provide some relief. Recent figures showing a decline in mortgage arrears and repossessions are also encouraging, but financial pressures remain.”
Jordan’s statement also addressed people running a business. “In the current circumstances, individuals and business owners should seek advice as soon as financial concerns arise,” she said. “There are options available, but the earlier people speak to a qualified R3 adviser, the better outcomes for them.”
Across the 12 months to 31 July, IVAs made up 59 per cent of individual insolvencies, DROs 35 per cent and bankruptcies 6 per cent, continuing what the Insolvency Service describes as a long-term decline in the share of cases that are bankruptcies.
The Insolvency Service’s separate company figures showed 1,931 registered company insolvencies in England and Wales in July, 5 per cent more than in June but 5 per cent fewer than in July 2025.
