Personal insolvencies in England and Wales up 7% annually in April

(Alliance News) - The number of people going financially insolvent across England and Wales jumped by 7% annually in April, according to Insolvency Service figures.

Some 10,920 people entered insolvency in April 2026, which was 7% higher than in April 2025 but 10% lower than in March this year.

The personal insolvency total for April this year was made up of 701 bankruptcies, 4,033 debt relief orders, DROs, and 6,186 individual voluntary arrangements, IVAs.

The Insolvency Service said that DRO numbers in April were 9% lower than a record high of 4,419 seen in March this year.

DRO numbers have increased following the removal of a GBP90 administration fee to obtain a DRO in April 2024 and the expansion of eligibility criteria in June 2024.

There were also 4,862 "breathing space" registrations in April 2026, marking a 33% fall compared with the same month a year earlier.

Breathing space schemes allow people time to get on top of their debts.

Sebrina McCullough, director of external relations at debt advice provider Money Wellness, said: "Today's figures should ring alarm bells. While insolvencies fell slightly compared to March, the overall trend shows more people are falling into serious financial difficulty than this time last year, and we fear this could be just the beginning."

Meanwhile, the number of registered company insolvencies in England and Wales was 2,085 in April, which was 2% higher than in March and 3% higher than in April 2025.

Giuseppe Parla, restructuring and insolvency director at Menzies LLP, said tensions in the Middle East were compounding issues for businesses, "driving inflation and disruptions across supply chains, energy and fuel prices".

Chris Tate, a restructuring and insolvency partner at accountancy and business advisory group Azets, said: "April's corporate insolvency numbers have been driven by a combination of geopolitical issues, legislative changes that will increase pressure on margins, ongoing cost challenges and customer caution, and creditors continuing to take an assertive attitude towards chasing down debts."

He said: "The economic fallout of the war in Iran remains a key concern for many directors. Businesses are struggling with the further increase in costs the conflict has caused and are seeking advice about how to manage this in increasing numbers, while the ripple effect of the war has made finance less available and affordable, and restructuring work even more challenging.

"Closer to home, the introduction of new business rates and changes to the minimum wage may be the final straw for many firms who were keeping their heads above water, and while we don't expect to see these translate into increased corporate insolvency numbers until the summer, they are likely to be another reason many firms are seeking advice now."

Tate said: "Any directors who are worried about their business or its finances should seek advice as soon as possible."

Sarah Rayment, co-head of global restructuring at Kroll, said: "The wider geopolitical challenges are driving market volatility and inflationary pressures.

"It is no surprise that recent business sentiment surveys and economic data show companies putting investments on pause as they manage supply chain disruption and higher energy costs.

"Uncertainty on the future of the current UK government will not help either. Management teams that are alert and agile to the threats on the horizon will be best placed to add stability during an extremely turbulent period."

By Vicky Shaw, Press Association Personal Finance Correspondent

Press Association: Finance

source: PA

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