The Insolvency Service has published the personal insolvency statistics for England & Wales for December 2024. The graph above shows the drop in DROs since the middle of year when the new eligibility criteria were implemented on 28 June 2024. This should potentially have seen a rise in DRO volumes. Despite this, the number of DROs in 2024 was the highest annual number on record.
The total number of individual insolvencies registered in 2024 for England & Wales was 117,947, which was 14% higher than the 103,434 registered in 2023. 57% (67,100) of individual insolvencies were IVAs, 37% (43,249) were DROs, and 6% were bankruptcies. In 2023, 62% of individual insolvencies were IVAs, 31% were DROs, and 7% were bankruptcies.
- 10,050 individuals entered insolvency in England & Wales in December 2024. This was similar to November 2024 and 23% higher than in December 2023
- Consisted of 549 bankruptcies, 3,473 DROs and 6,028 IVAs. The number of DROs in December 2024 was 5% lower than in November
- IVAs registered in December were 10% higher than the average monthly number seen in 2024
- Bankruptcy numbers remained at about half of pre-2020 levels and were also lower than in December 2023
Money Wellness remained the top DRO hub with 1,297 registrations, with Citizens Advice second with a total of 1,227.
The Insolvency Group remained the leading provider of IVAs with 1,103. PayPlan were second with 507, with Creditfix Group third.
PayPlan is an existing user of the Consumer Duty Services integrity score, used to support the assessment of IVA sustainability at the time of the meeting of creditors. Pilots are underway with other volume providers. Sustainable IVAs looks to be a 'hot topic' in 2025.
Breathing space
Between the start of the scheme in May 2021 and 31 December 2024, StepChange Debt Charity registered 59% of all breathing spaces.
Northern Ireland
In December 2024, there were 101 individual insolvencies in Northern Ireland. This was 33% higher than in December 2023. There were 84 IVAs, eight bankruptcies and nine DROs.
Conclusions
We will await to see whether the upward trend begins in Q1 2025 for both DROs and IVAs.
We can expect continued Financial Conduct Authority regulatory focus on the debt advice into formal debt remedies and RPB focus on the process past SIP3 for IVAs and PTDs in Scotland. Citizens Advice has issued a report that may add fuel to the fire on this.
Consumer Duty Services supports the 3 core recommendations in the report:
- Improve the quality of debt advice
- Balanced and consistent supervisory regulation across the debt advice sector, including not-for-profit and for-profit
- Build a formal personal insolvency framework that is fit-for-purpose, taking account of best practices and schemes that seem to work like DAS/DPP in Scotland
The Insolvency Service personal insolvency reform review continues into 2025. The FCA CONC 8 review is down to start in H1 2025 in their regulatory grid.
We couldn't align with the Citizens Advice statistics referenced based on our experience of analysing several hundred thousand approved IVAs from 2017 to 2024. The Citizens Advice findings were based on a survey of over 1,000 people who are currently in an IVA or who have been in one in the last 5 years. We would certainly challenge the first bullet below in the current market. We cross referenced with the volume provider scheme data published by the IPA.
Report headlines:
- 56% of people in an IVA had £75 or less leftover each month after paying for essentials
- 14% of people in an IVA were not told about other debt solutions
- 66% of people were not told at least one piece of key information before entering an IVA
- 20% are benefit only cases
- 21% were eligible for a DRO
- 15% started the IVA with a negative DI
The Insolvency Service issued their own report on early IVA failures in October 2024 and discussed it at the Insolvency Practitioners Association (IPA) conference on 28 November 2024 that Consumer Duty Services spoke at along with John Fairhurst of PayPlan and Peter Bowen of Aryza.
Director, Kevin Still, recently commented on the Money and Pensions Service impact report on MaPS funded debt advice in 2023/24.
Kevin reflected on the lack of outcome data from debt advice sessions from funded providers, including debt solution recommendations and their downstream outcomes.
References
Commentary - Individual Insolvency Statistics December 2024 - GOV.UK
13/11/2024 - PayPlan first IVA volume provider to fully adopt IVA Integrity ScoreNews Details | Consumer Duty Services
Insolvency Practitioners Association responds to Insolvency Service research into Individual Voluntary Arrangement market concerns | Insolvency Practitioners Association
IPA Volume Provider Regulation (VPR) Scheme 2023 Benchmark Report | Insolvency Practitioners Association