Insolvency Statistics for Q4 and the whole of 2015

29 January 2016

Insolvency statistics released today by the government reveal the estimated number of insolvent companies between October and December fell by 10.5% year on year. The number decreased 2.7% since the third quarter of 2015.

Total annual company Insolvencies were at the lowest level since 1989.This decrease was mainly driven by a decrease in compulsory liquidations, which fell to the lowest annual total since 1981.   This indicates that HMRC who make up 60% of all petitioners have started to use winding up petitions less and less as a means of collecting debts.  

There is a similar story in the personal market with the total number of debt relief orders, bankruptcies and IVAs all down. 


 
Source: https://www.gov.uk/government/statistics/

There were an estimated total of 3,495 liquidations during the fourth quarter. The number of creditors voluntary liquidations (CVLs) fell by 3.0% since the same period in 2014 (and a 1.0% decrease since the third quarter). As for compulsory liquidations, the number dropped to the lowest level since 1989. This was 30% down from the same period last year and a 5% drop since the previous quarter.

The estimated total number of administrations of There were an estimated 350 administrations in Q4 2015, a decrease of 1.1% compared to the previous quarter and 5.6% lower than the same quarter in 2014. There were an estimated 76 CVAs in Q4 2015, a decrease of 30.9% on the previous quarter and 44.5% lower than Q4 2014. There were an estimated two administrative receiverships. 


 
Source: Q4 2015 UK gov infographic 


Over the last year, the liquidation rate was 0.48% of active companies – the lowest it’s been since 1984. 

As expected, insolvencies continue to decline as the economy improves.  More and more businesses are looking to alternative routes for finance and using informal turnaround methods. There are more funding choices available than ever before. There does appear to be more reluctance on the part of HMRC to put pressure on companies however in the last weeks of 2015 there did appear to be an uptick in activity so this might be reflected in the 2016 stats.  

The Insolvency Service has recently made some changes to their methods of researching company insolvencies and statistical information. Estimations are used for the current quarter to assist in providing more accurate information and to avoid missing new insolvencies. Repetitive data will also be prevented using the new system. You can find more information on the revisions here