Annual reviews

What is an annual review

An annual review is a routine, formal assessment of your financial circumstances carried out by your Insolvency Practitioner around the anniversary of your IVA start date. The purpose is to ensure your payments remain proportionate to what you can genuinely afford, and to identify any changes that may affect the arrangement.

An annual review is not a test you can pass or fail. It is a factual assessment of your current income and expenditure compared to the figures stated in your original IVA proposal.

What you need to provide

Your IP will typically contact you by letter or email requesting the following documents:

• Three months of recent payslips (or proof of income if self-employed)
• Three months of bank statements for all accounts
• Details of any changes in household composition or expenditure
• Evidence of any bonuses, overtime, or additional income received
• Your updated income and expenditure figures

You have a legal obligation to provide this information. Failing to respond to a review request — or providing inaccurate information — could be recorded as a breach of your IVA.

If your income has changed

If your income has increased, your IP will calculate whether a higher monthly contribution is required. Most IVA proposals use the following approach:

1. Your current net income is compared to the income stated in your original proposal.
2. If the increase exceeds a threshold (often 10% of your original income), a proportion of the surplus is added to your monthly payment.
3. A common formula is that 50% of any net income above the threshold is added to your contribution.

If your income has decreased significantly, your IP may propose a formal variation to reduce your payments. This requires creditor approval and may extend the duration of your IVA. You should not simply reduce your payments without agreement — continue paying the agreed amount while the variation is being processed.

If your income has stayed broadly the same, your payment will typically remain unchanged.

What happens after the review

Your IP will write to you with the outcome, typically within a few weeks of receiving your documents. The letter will confirm:

• Whether your monthly payment is changing
• The new amount, if applicable, and when it takes effect
• Whether a formal variation is being proposed
• Any action required from you

Keep a copy of all annual review correspondence. It provides a useful record of how your IVA has progressed.

If you disagree with the outcome

If you believe the outcome of an annual review is incorrect — for example, if you think your IP has used inaccurate figures — you should raise this in writing with your IP as soon as possible. Your IP is required to have a formal complaints procedure.

If you are not satisfied with your IP's response, you may escalate the matter to their regulatory body. See Your rights and the FCA for the complaints process.