NEARLY 12,000 people entered insolvency in June as “debt distress” climbs to its highest level since 2022 – with experts warning it’s “a sign that financial pressure has moved beyond households simply tightening their belts”.
In June 2026, 11,871 individuals entered insolvency in England and Wales. This was 5% higher than in May 2026 and 16% higher than in June 2025, new data shows.
The individual insolvencies consisted of 674 bankruptcies, 3,879 debt relief orders (DROs) and a hefty 7,318 individual voluntary arrangements (IVAs).
The number of IVAs registered in June 2026 was higher than in May 2026 and higher than the average number of 5,987 seen in 2025.
With the exception of December 2025, which was affected by the clearing of a backlog of cases that were agreed in previous months, this is the highest monthly number since November 2022.
DRO numbers in June 2026 were lower than in May 2026. Bankruptcy numbers were similar to May 2026 but higher than June 2025.
Financial pressure
Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages, said these figures are a warning sign for the UK economy.
He added: “A rise in insolvencies is often a sign that financial pressure has moved beyond households simply tightening their belts. By the time someone enters an IVA or another formal insolvency process, they’ve usually exhausted the easier options like cutting spending or relying on savings.
“I’d expect pressure to remain elevated over the coming months. While inflation has eased, many households are still living with the cumulative impact of higher mortgage payments, rents and everyday living costs. For some, the financial squeeze isn’t suddenly getting worse overnight. It’s lasting longer than they expected.”
Tracey Dixon, Buy-to-Let Mortgage Specialist & Owner at Cardiff-based Pure Mortgage and Protection, said she sees clients who are on the edge.
She added: “Insolvency rarely happens overnight. It’s usually the final chapter of months, sometimes years, of people trying to hold everything together. As a mortgage broker, I regularly speak to homeowners who are doing everything they can to stay afloat, but rising living costs, relationship breakdowns and tighter affordability rules mean many feel trapped.
“The worrying part is that people often seek help only when their options have become limited. Lenders and the wider industry have an opportunity to do more by identifying financial stress earlier and offering practical solutions before people reach crisis point. The sooner someone gets advice, the more likely it is that their home and finances can be protected.”
Debt distress
Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, said “debt distress” is rising.
He added: “Higher taxes, higher interest rates and the lag from the cost-of-living crisis are catching up with household balance sheets. Inflation has moderated, not reversed, prices are still rising, just more slowly. Resilience has worn thin: debt distress has climbed to its highest since late 2022, no longer confined to the poorest households.
“Squeezed middle earners, hit by mortgage resets, rising council tax and heavy utility bills are turning to formal debt restructuring. For two years many plugged the wage-inflation gap with unsecured credit and BNPL. Those lines are now maxed out, and minimum payments are unsustainable.
“Corporate insolvencies in hospitality, retail and construction remain elevated, and job losses feed straight into household figures. This isn’t a sudden shock. It’s a fuse burning slowly: pandemic buffers gone, credit maxed, and the lag from monetary tightening still working through the system.”
Photo by Kostiantyn Usatenko on Unsplash.
