StepChange updated its Breathing Space suitability criteria, reducing registrations

StepChange, described by the Insolvency Service as the largest money advisor group by number of cases, updated its suitability criteria for clients applying for Breathing Space in November 2025, according to the Insolvency Service¹. The change has been followed by a fall in registrations for the scheme, which gives legal protection from creditors for 60 days and was launched on 4 May 2021³.

The Insolvency Service said in its July 2026 release that the change "has led to a reduction in the volume of applications both for this provider and overall"¹. In its August 2026 release it attributed lower numbers to the same decision, saying numbers "have been lower since December 2025 after the largest money advisor group by number of cases updated its suitability criteria for its clients to apply for a breathing space"³.

Registrations have fallen year on year in each month reported since. There were 4,495 registrations in June 2026, 41% lower than in June 2025, of which 4,365 were standard Breathing Space and 130 were mental health crisis Breathing Space². In July 2026 there were 5,248 registrations, 38% lower than a year earlier, split into 5,098 standard and 150 mental health crisis registrations¹. In August 2026 there were 5,012 registrations, 32% lower than in August 2025³. Breathing Space figures are not seasonally adjusted, the Insolvency Service says, because the time series is not yet long enough to support reliable adjustment³.

Formal insolvency numbers moved in the other direction over the same period. In August 2026, 11,644 individuals entered insolvency in England and Wales, similar to July 2026 and 3% higher than in August 2025³. That month's total comprised 725 bankruptcies, 3,880 debt relief orders and 7,039 individual voluntary arrangements³. In the 12 months to 31 August 2026, one in 360 adults in England and Wales entered insolvency, a rate of 27.8 per 10,000 adults, up from 24.5 per 10,000 in the 12 months to 31 August 2025³. Over that 12-month period, 59% of individual insolvencies were IVAs, 35% were DROs and 6% were bankruptcies³.

The Insolvency Service notes that people who register for Breathing Space may or may not go on to enter a formal insolvency procedure, and those who do are counted separately in its tables³. It has not reported how many of those who would previously have registered have instead taken another route.

Why it matters for households

Breathing Space is the 60-day protection from creditors under the Debt Respite Scheme, and a separate mental health crisis Breathing Space route exists for people receiving crisis treatment. Registrations are made through a debt adviser, so a decision by the largest adviser by case numbers to change which clients it puts forward affects how many people reach the scheme at all. The Insolvency Service's figures show the effect running from December 2025 into 2026, with monthly registrations between 32% and 41% below their year-earlier levels in the months reported³. The protections themselves have not changed: the scheme still gives 60 days of legal protection from creditors, and the rules on whether Breathing Space stops bailiffs, court action and eviction are unchanged³. For anyone weighing options, the Insolvency Service also reports token payment plans are not counted in these statistics, as informal debt solutions are excluded³.

What happens next

The Insolvency Service's next individual insolvency release is due on 20 October 2026³. It has said it is still working to resume publication of information on whether a bankrupt was self-employed, with an update promised no later than December 2026, after moving to a new case management system on 1 November 2025³.