The number of people going financially insolvent across England and Wales jumped by 10% in May compared with the same month a year earlier.
The Insolvency Service’s figures showed 11,223 personal insolvencies were registered in May, which was also 2% higher than the number of insolvencies registered in April.
The individual insolvencies consisted of 656 bankruptcies, 4,191 debt relief orders (DROs) and 6,376 individual voluntary arrangements (IVAs).
DRO numbers in May were slightly higher than in April but lower than a record high seen in March.
The number of people taking out DROs has been increasing in recent years following the expansion of eligibility criteria.
The number of IVAs registered in May was also slightly higher than in April and similar to average numbers seen over the past 12 months, the Insolvency Service said.
Bankruptcy numbers remained at about half of pre-2020 levels and similar to levels seen in May last year.
Looking at Breathing Space registrations, which give people time to get on top of their debts, the Insolvency Service said there were 4,817 registrations in May, which was 38% lower than the same month a year earlier.
Meanwhile, the number of registered company insolvencies in England and Wales was 1,868 in May, 10% lower than in April, and 16% lower than in May 2025.
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Robert Young, restructuring and insolvency partner at accountancy and business advisory group Azets, said: “The reality is that despite the fall in insolvencies compared to last month and last May, numbers are still high and businesses are still struggling – with many facing an uncertain future.
“Geopolitical issues, increases in costs, political uncertainty, a lack of affordable finance and creditors chasing overdue debts in an attempt to pay their own bills are just some of the issues that are driving firms into financial distress.
“Unless the climate becomes easier and some way is found of lightening the cost load on businesses, it’s likely demand for advice and support will remain high in the coming weeks and months as more firms feel the effects of the challenging trading climate.”
Giuseppe Parla, restructuring and insolvency director at Menzies LLP, said: “Households have less to spend, energy, labour, oil and food prices remain elevated, and the question for many operators is whether short-term measures will be enough to offset what is stacking up against them.”