INSOLVENCIES are up ahead of the Budget and experts fear things will get worse before they get better given the “fiscal hell” that could be unleashed in next week’s Budget.
In October 2025, 10,552 individuals entered insolvency in England and Wales. This was 4% lower than in September 2025 and 14% higher than in October 2024, The Insolvency Service announced today.
The individual insolvencies consisted of 599 bankruptcies, 3,846 debt relief orders (DROs) and 6,107 individual voluntary arrangements (IVAs).
DRO numbers in October 2025 were lower than the record high seen in August 2025, but remained at the historically high levels seen over the past 18 months.
The number of IVAs registered in October 2025 was higher than the average monthly number seen in the first half of 2025. Bankruptcy numbers remained at about half of pre-2020 levels and were similar to October 2024.
Meanwhile, the number of registered company insolvencies in England and Wales was 2,029 in October 2025, 2% higher than in September 2025 (1,995) and 17% higher than the same month in the previous year (1,739 in October 2024).
The Insolvency Service said monthly company insolvency numbers so far in 2025 have been slightly higher than in 2024, but slightly lower than in 2023, which saw a 30-year high annual number of insolvencies.
Company insolvencies in October 2025 consisted of 301 compulsory liquidations, 1,592 creditors’ voluntary liquidations (CVLs), 119 administrations and 17 company voluntary arrangements (CVAs). There were no receivership appointments.
The number of compulsory liquidations was 8% higher than September 2025 and was higher than both October 2024 and the 2024 monthly average. The number of CVLs in October 2025 was similar to both September 2025 and the 2024 monthly average. Administrations were lower than in September 2025, while CVAs remained the same.
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, fears more insolvencies lie ahead: “Both individual and company insolvencies are up relative to a year ago and there’s every chance things will get worse before they get better.
“Tax hikes are squeezing the life out of firms and unemployment hit 5% this month, piling further pressure on households. Inflation remains stubbornly high and, in just over a week, we have the Budget, which could unleash fiscal hell on the economy.
“This does not make for good reading and there are alarm bells as we enter 2026.”
Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages, said last year’s Budget has been a key contributor: “With personal insolvencies up 14% and company insolvencies up 17% year on year, the economy is showing the impact of the last Budget and the increased costs of trading.
“This country is skating on very thin ice. Let’s not forget that behind this data are real people and real businesses who are really suffering. There is no silver lining to these clouds ahead of another brutal Budget storm.”
Patricia McGirr, Founder at Burnley-based Repossession Rescue Network, said: “Insolvency numbers aren’t a warning sign. They’re proof that people and firms are running out of road. October saw more than ten thousand individuals enter insolvency and company failures continue to rise.
“DROs and IVAs remain at record levels because households can’t absorb any more financial shock, and the rise in compulsory liquidations shows many businesses aren’t choosing to close; they’re being pushed.
“For consumers, one missed payment can trigger fees and default rates that make recovery almost impossible. For small firms, shrinking margins and creditor pressure are finishing them off long before support appears.
“If lenders and policymakers want fewer failures, they need to prioritise prevention. A system that punishes distress instead of helping people stabilise is always going to create more chaos.”
Dariusz Karpowicz, Director at Doncaster-based Albion Financial Advice, cut straight to the chase: “October’s insolvency figures read like a financial horror story. Over 10,500 individuals and 2,000 companies went bust, marking increases of 14% and 17% respectively from last year.
“You’re watching the cost of living crisis unfold in real numbers. People aren’t spending, businesses can’t cover rising costs, and unemployment just hit 5%. The gap between wages and prices keeps widening.
“Debt relief orders remain stubbornly high whilst company liquidations climb steadily. Tax increases squeeze firms harder, forcing closures that cost jobs and create a downward spiral in your local economy.
“With inflation refusing to budge and more financial pressure ahead, expect these numbers to worsen before any recovery appears on the horizon.”
Mike Staton, Director at Mansfield-based Staton Mortgages, blamed both the Government and the ease of taking on debt in the current financial system for the number of insolvencies: “The Labour government’s super power appears to be the ability to destroy small businesses and the economy in a blink of the eye.
“These stats do not surprise me in the slightest and we are all feeling the pinch. The country is being strangled by taxation by a government who could not be any further away from its core value.
“However, not all of these figures are the fault of the Labour Party, as personal debt is a huge problem in the UK. The unregulated loan market and credit card market is too easily accessible and, without advice, this leads to financial suicide with many people taking on too much debt to live a Champagne lifestyle on a lemonade budget.
“IVAs are also a huge problem in the UK, an unadvised financial form of Vampirism. I have dealt with too many people to mention that have been in touch with an IVA firm over the phone to be mis-advised by an unqualified and unregulated contact centre employee to take on an IVA without fully understanding what these actually are.”
Last week, Ministry of Justice data showed repossessions were up 40% in the third quarter of 2025 compared to the same period last year.
