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Bankruptcy Statistics in the UK – 2022

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bankruptcy statistics

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In January 2022, there were 32% fewer bankruptcies than in January 2021, and 63% fewer than in January 2020. With the help of a combination of ONS and .Gov data, we could see trends in debt levels as well as changes in bankruptcy rates across various demographics such as region, gender and age.

Bankruptcy Statistics – 2022

  • The minimum debt required to declare bankruptcy rose from £750 to £5,000 in 2015.
  • During Q4 of 2021, the UK had 1,824 bankruptcies, down 1256 compared to Q4 of 2020.
  • Since 2011 the UK has seen a steady decrease in the amount of bankruptcies. There were nearly 12,000 bankruptcies in Q1 alone.
  • Other forms of debt relief such as DRO, insolvencies and IVAs have substantially increased.
  • The bankruptcy rate tends to be higher for males than females.
graph showing bankruptcy trend

The minimum debt required to declare bankruptcy rose from £750 to £5,000 in 2015.

Regional Bankruptcy Statistics

With 4.5 bankruptcies per 10,000 adults in 2019, the South West had the highest rate of bankruptcies. This was slightly higher than the North East, which had had the highest rate every year since 2011 (4.4 per 10,000 adults). London had the lowest rate, 2.7 percent, and has had the lowest rate every year since 2006.

The East Midlands showed the biggest increase in bankruptcy rates compared to 2018, with a rise of 0.3 per 10,000 adults. The West Midlands, Wales, and Yorkshire and The Humber experienced the biggest drops in contrast, however, these drops were very marginal. Rates rose in five locations while falling in five.

Torbay was the local authority with the highest bankruptcy rate in 2019, with 7.3 bankruptcies for per 10,000 adults. This was after the Isles of Scilly and the City of London were excluded due to their relatively small populations. Additionally, Torbay was the local authority that had the highest rate in the year 2018. Cambridge had the nation’s lowest rate of personal bankruptcies, with 1.6 filings for every 10,000 adult residents. Cambridge was also ranked in the top 10 for the lowest bankruptcy rates in 2018.

During Q4 of 2021, the UK had 1,824 bankruptcies, down 1256 compared to Q4 of 2020.

There was a larger rate of bankruptcy in 170 of 336 local governments (51%) in 2019 compared to 2018, while the percentage was unchanged in 16 local governments (5%) and decreased in 150 local governments (45%). The local authority with the biggest increase in bankruptcy, excluding the Isles of Scilly because to their small population, was Great Yarmouth (a rate increase of 3.3 per 10,000 adults compared to 2018). West Devon experienced the biggest drop, which was 2.7 per 10,000 people.

Gender and Age Bankruptcy Statistics

In 2019, bankruptcy filings were at their lowest among younger adults, at their highest among those aged 35 to 44, and then declined again among older adults. This pattern, which dates back to 2006, is consistent with the overall rise in bankruptcy rates. In all age groups, there were more males than females filing for bankruptcy per 10,000 adults, albeit the difference in rates varied depending on the age group.

The bankruptcy rate tends to be higher for males than females.

bankruptcies by gender

It seems that as people become older, the gender disparity grows more pronounced. Male bankruptcy rates were 1.2 times higher than female rates for those between the ages of 18 and 24. This increases with age; among 65-plus males, the bankruptcy rate was 2.2x the male rate.

Why are the rates of Bankruptcy dropping?

As you can see from the graph below, other forms of debt relief are available and tend to be a more preferable option. This is because options like a debt relief order (DRO), individual voluntary arrangements (IVA) and any other forms of insolvency are becoming more widely known.

Other forms of debt relief such as DRO, insolvencies and IVAs have substantially increased.

What are the causes of Bankruptcy?

There are many reasons why people fall into debt and may feel it’s necessary to declare themselves bankrupt.

Divorce

Divorce and the division of assets and property can sometimes get messy. Aside from the fact that divorce is personally devastating, it can also lead to serious financial problems. When a household is divided, the costs significantly rise and the income is split. When one or both parties are unable to meet their financial obligations, it can be difficult to keep tabs on the costs that accumulate.

Mismanagement of finances

Whether intentional or not, mismanagement of finances can quickly lead to serious debt. Mismanagement can arise in financially uneducated people taking out credit they cannot afford.

Job loss

Unexpected job loss is not an uncommon or unlikely occurrence in the current economy. With the rise in unemployment, the bankruptcy rate has grown. Employees may be laid off if a business goes under, leaving them with significant debts they are unable to pay. When a person has lost their job, their income drops, and they are obligated to pay their bills even though they no longer have the financial resources to do so.

Unexpected costs

Sometimes costs arise seemingly out of nowhere – the car breaks down or the washing machine bites the dust. Either way, when this happens a person has to find a way of repairing or replacing these vital parts of everyday life. However, this can cause a person to fall into debt that they cannot climb out of.

If you’re worried about any debt problems you can speak to any of the following for free advice: 

  1. Citizens Advice
  2. National Debt Line
  3. Step Change

References

Gov.uk

Statista

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