Evolving Financial Landscapes: Aryza’s Insights on Q4 2024 Insolvency and Lending Trends
Aryza Group is pleased to share its analysis of recent trends in the individual and company insolvency market in England, Wales, and Northern Ireland from October to December 2024, based on the latest data released by the Insolvency Service.
Personal Insolvency
The total number of individual insolvencies in the fourth quarter of 2024 reached 29,013, up from 24,910 during the same period in 2023. This 16% increase is indicative of the economic strain from inflation, rising interest rates, and higher costs of living combined with changes in insolvency accessibility.
The total number of individual insolvencies in October was 8,952, with similar levels for the same period last year. This consisted of 596 bankruptcies, 4,563 individual voluntary arrangements (IVAs), which was 13% lower than in October 2023, and 3,793 debt relief orders (DROs), mirroring a similar level to 2023.
In November, 10,012 people entered insolvency, 25% higher than the levels at the same time last year. These were made up of 589 bankruptcies, 5,730 IVAs, and 3,693 DROs.
For December, there were 10,050 individual insolvencies which is 23% higher than the same period in 2023. This consisted of 549 bankruptcies, 3,473 DROs and 6,028 IVAs. Interestingly, the number of IVAs registered in December was 10% higher than the average monthly number seen in 2024.
Richard Haymes – Associate Director of Policy and External Relations at Aryza Group, commented:
“New personal insolvencies registered saw a significant increase in the final quarter of 2024, driven by several factors. The ongoing squeeze on household budgets, including the rising cost of living, increased credit costs, and reduced government support, has led many to address unsustainable debt through insolvencies and other debt solutions. The removal of the DRO customer fee and the increase in the debt limit to £50k have also contributed, with new monthly volumes surpassing the 2014-2023 average of 2,114. Additionally, following the FCA’s ban on the debt packager model, IVA providers have adapted their marketing strategies. As a result, new IVA volumes in Q1 2025 are expected to align with or exceed those seen in Q4 2024.”
This is reflected by National Debtline, run by the Money Advice Trust, which reported a 57% increase in calls to its helpline in the first two weeks of January compared to last year, with many callers struggling with energy, water bills, and debts to friends and family. In such cases, personal insolvency can offer relief, pausing creditor actions and enabling affordable repayment plans to help customers become debt-free.
Corporate Insolvency
The total number of corporate insolvencies in the fourth quarter of 2024 reached 5,551, a slight decrease from 6,788 during the same period in 2023. This decline suggests that businesses are beginning to stabilise after a turbulent period marked by economic uncertainty and rising costs. The reduction in corporate insolvencies could reflect the gradual easing of inflationary pressures, which have helped businesses manage their operational expenses more effectively. However, while this decrease is encouraging, businesses continue to face challenges, including lingering pandemic-related debts, higher interest rates, and cautious consumer spending. Stability remains fragile, and further support may be necessary to ensure that businesses can navigate the ongoing economic recovery and avoid falling into financial distress.
In October, there were 1,747 corporate insolvencies, which is 24% lower than the numbers in the same period in 2023, but the number of insolvencies remained much higher than those seen during the COVID-19 pandemic. This was made up of 1,445 creditors’ voluntary liquidations (CVLs), 100 administrations, 12 company voluntary arrangements (CVAs), and 188 compulsory liquidations.
November saw 1,966 insolvencies which is 12% lower than the numbers in November last year. This consisted of 1,565 CVLs, 132 administrations, 14 CVAs, 254 compulsory liquidations and one receivership appointment.
When looking at the statistics from December, the number of insolvencies was 1,838, 6% lower than November and 14% lower than the same month in the previous year. These insolvencies were made up of 273 compulsory liquidations, 1,421 CVLs, 127administrations and 17 CVAs.
Richard Haymes – Associate Director of Policy and External Relations at Aryza Group, commented:
“Corporate insolvencies peaked following the pandemic and a decade of significant challenges for businesses, including austerity, inflation, rising credit costs, geopolitical tensions, and Brexit. New insolvencies are down sharply compared to the same period last year as the fallout from Covid seems to be finally washing through the system. CVLs remain the most common type of corporate insolvency, although falling from a historic high in 2023.
Looking ahead to 2025, businesses will likely continue facing challenges. Confidence has been shaken following the significant tax and regulatory changes announced in the Autumn Budget, alongside new uncertainties arising from the US presidential inauguration in January. Our 2025 expectation is that corporate insolvencies will remain at levels similar to those seen in Q4 2024 which would mean an 8% decrease versus 2024.”
Lending Market Insights
From October to December 2024, lending activity fluctuated significantly, reflecting both caution and resilience in the borrowing landscape. Net lending to households and private sector companies surged to £11.8 billion in October, dropped to -£2.1 billion in November, and rebounded to £4.8 billion in December. These shifts illustrate the vigilant, yet adaptive strategies lenders are employing in response to ongoing economic pressures.
October saw robust activity with net mortgage lending of £3.4 billion and consumer credit borrowing of £1.1 billion, indicating sustained borrowing demand despite heightened living costs.
In November, however, the lending environment cooled significantly. Net mortgage lending recorded -£2.1 billion, with net repayments reducing overall lending, potentially reflecting caution in borrowing, higher repayments due to existing debt, or tighter lending conditions. Consumer credit borrowing was relatively stable at £0.9 billion, suggesting that borrowers were prioritising debt repayments amid higher interest rates.
December marked a recovery in borrowing confidence. Net mortgage lending rose to £3.6 billion, while consumer credit borrowing increased to £1 billion and the net flow of lending reached £4.8 billion, primarily driven by household borrowing.
These patterns reflect a lending market in flux, with both borrowers and lenders adapting to evolving conditions. Lenders are emphasising responsible lending practices to balance risk management with ongoing financial support for households and businesses.
Looking ahead, Aryza is committed to providing ongoing quarterly analysis and commentary on the personal and corporate insolvency market, helping stakeholders navigate this evolving landscape effectively, and ensuring they are well informed about the latest trends and developments.
Find out more about Aryza’s Insolvency Suite today.