Record number of people took out debt relief orders in May

A record number of people in England and Wales took out debt relief orders (DROs) in May, according to Insolvency Service figures.

The number of DROs reached a new record monthly level of 3,716, an increase of 8% from a previous record high set in April.

May’s figure was the highest since the introduction of DROs in 2009.

Higher numbers of DROs in April and May 2024 coincided with the abolition of a £90 administration fee to obtain a DRO from April 6 2024.

The number of people needing “breathing space” from their debts also jumped annually in May.

Across England and Wales, 7,652 breathing space registrations were recorded in May 2024. This is 14% higher than in May 2023.

Of the breathing space registrations, 7,547 were standard breathing space registrations and 105 were mental health breathing space registrations.

People who register for breathing space, giving them time to access debt help without the stress caused by spiralling debt, may or may not end up entering a formal insolvency procedure.

Some 9,266 people entered formal insolvency in England and Wales in May, which was 3% higher than in May 2023.

Formal insolvencies are made up of DROs, individual voluntary arrangements (IVAs) and bankruptcies.

The Insolvency Service said bankruptcy numbers remain at about half of pre-2020 levels.

It added that numbers of bankruptcies and IVAs in the first five months of 2024 were similar to numbers seen in the second half of 2023.

Steve Vaid, chief executive of the Money Advice Trust, the charity that runs the National Debtline, said: “The record numbers of debt relief orders registered reflects the challenges many are facing in keeping their finances afloat.

“Experiencing financial difficulty is often stressful, but options like debt relief orders can help remove some of the financial and emotional pressure.”