The number of individuals entering financial insolvency across England and Wales surged by 7% annually in April 2026, according to newly released figures from the Insolvency Service. A total of 10,920 people became insolvent during the month, representing a 7% increase compared to April 2025, although it marked a 10% decline from the previous month.
Breakdown of Personal Insolvencies
The April total comprised 701 bankruptcies, 4,033 debt relief orders (DROs), and 6,186 individual voluntary arrangements (IVAs). Notably, DRO numbers in April were 9% lower than the record high of 4,419 recorded in March 2026. The Insolvency Service attributed the elevated DRO figures to the removal of the £90 administration fee in April 2024 and the expansion of eligibility criteria in June 2024.
Additionally, there were 4,862 registrations for the “breathing space” scheme in April 2026, a 33% decrease compared to the same month last year. This scheme provides individuals with temporary relief from debt enforcement actions.
Expert Concerns on Rising Debt
Sebrina McCullough, director of external relations at debt advice provider Money Wellness, expressed alarm at the figures. “Today’s figures should ring alarm bells,” she said. “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.”
Corporate Insolvencies Also Climb
In the corporate sector, the number of registered company insolvencies in England and Wales reached 2,085 in April, a 2% increase from March and a 3% rise compared to April 2025. Experts highlighted geopolitical tensions and economic challenges as key drivers.
Giuseppe Parla, restructuring and insolvency director at Menzies LLP, noted that 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 Azets, elaborated: “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.”
Impact of Geopolitical and Domestic Factors
Tate further explained: “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.”
He added that domestic factors such as new business rates and changes to the minimum wage could be the final straw for many firms. “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 urged directors worried about their businesses to seek advice as soon as possible.
Sarah Rayment, co-head of global restructuring at Kroll, commented: “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.”
