Increased number of individuals sought debt relief assistance in August (month mentioned)
In the period from September 1, 2024, to August 31, 2025, the insolvency rate in England and Wales stood at 52.6 per 10,000 companies, a figure significantly lower than the peak of 113.1 per 10,000 companies seen during the 2008-09 recession.
The report, released in August 2025, also highlighted a record high number of debt relief orders (DROs) in the same month, with 4,239 DROs issued, exceeding a previous high of 4,191 set in June 2024. The high number of DROs since April 2024 is attributed to the abolition of the upfront £90 fee.
Tom Russell, president of insolvency and turnaround trade body R3, stated that the rising number of DROs reflects the reality that more households are unable to meet basic costs. The number of DROs in August 2025 was 88% higher than the long-term (2015 to 2024) monthly average of 2,252.
Simultaneously, the number of bankruptcies in August 2025 remained at about half of pre-2020 levels but was 2% higher than in August 2024. The number of individual voluntary arrangements (IVAs) registered in August 2025 was also higher than both the average monthly number seen in 2024 and the first seven months of 2025.
The ongoing issues businesses face with costs and shrinking margins, changes in UK tax policy, national economic and geopolitical issues, and high interest rates have all contributed to the challenging business climate. Colin Haig, a restructuring partner at accountancy and business advisory group Azets, mentioned that companies are under pressure to cut costs.
Benjamin Wiles, managing director of Kroll, noted a sharp rise in administrations among professional services firms, particularly among law firms and management consultancies. Giuseppe Parla, business recovery director at Menzies, stated that the festive season will decide the fate of many retailers.
The number of monthly company insolvencies in the first eight months of 2025 was slightly higher than in 2024 and at a similar level to 2023. The number of companies on the effective register has more than doubled over the period from 2008-09 to 2025.
In June 2024, the criteria for DRO eligibility were expanded, with the debt threshold increased from £30,000 to £50,000 and the allowable value of an exempt motor vehicle increased from £2,000 to £4,000. Registering for breathing space, which gives people time to get on top of their debts, saw 7,395 registrations in August 2025, a 2% increase from August 2024.
Bankruptcy numbers in August 2025 remained at about half of pre-2020 levels but were 2% higher than in August 2024. The total number of people going financially insolvent in August 2025 in England and Wales increased by 16% compared to the same month in the previous year.
Despite the increase in insolvencies, Benjamin Wiles mentioned that the second half of the year has been relatively stable in terms of insolvencies. The insolvency total in August 2025 consisted of 4,239 DROs, 622 bankruptcies, and 6,487 individual voluntary arrangements (IVAs). The ongoing challenges faced by businesses and households in England and Wales continue to be a significant concern for policymakers and financial experts.
Read also:
- A Business Model Explained: Its Purpose and Benefits for Your Venture
- Trump administration faces lawsuit by Denmark's Ørsted over halted wind farm project
- U.S. takes a pledge of $75 million to foster Ukrainian resources development
- Deep-rooted reinforcement of Walkerhughes' acquisitions through strategic appointment of Alison Heitzman
){kind=link}