The Insolvency Service publish the seventeenth release of its monthly series to provide more up to date information on the number of companies and individuals who are unable to pay debts and enter formal insolvency procedures due to the COVID-19 pandemic, as it continues. The release supplements the Insolvency Service’s quarterly company and individual insolvency National Statistics.
Be aware that there have been Government measures put in place in response to the coronavirus pandemic, including temporary restrictions placed on the use of statutory demands and certain winding up petitions and enhanced government financial support for companies and individuals. There was also the Corporate Insolvency and Governance Act 2020 and for individuals, the Breathing Space scheme. As of 29 June 2021, new monetary eligibility limits for Debt Relief Orders in England and Wales came into effect. All of these have a part to play in the statistics.
Company Insolvencies (UK)
In August 2021 there was a total of 1,348 registered company insolvencies across England and Wales, further broken down as follows:
- 1,256 creditors voluntary liquidations (CVLs) – 30% higher than that in August 2019 and more than double that in August 2020
- 55 administrations – 50% lower to that in August 2020 and 69% lower than in August 2019
- 35 compulsory liquidations – 55% lower to that in August 2020 and 82% lower than August 2019
- 2 company voluntary arrangements (CVAs) – 87% lower than in August 2020 and 93% lower than in August 2019
- No receivership appointments
August 2021 saw the highest number of registered company insolvencies since the start of the first UK lockdown in March 2020, similar to pre-pandemic levels. These figures are 71% higher than that in the same month the previous year but 1% lower than that in the same month two years before (pre-pandemic). The overall increase in company insolvencies was thought to be due to a higher amount of CVLs.
Note: between 26 June and 31 August 2021, thirteen companies were granted a moratorium and nine had restructuring plans sanctioned by the court. These procedures were created by the Corporate Insolvency and Governance Act 2020.
Company Insolvencies (Scotland)
August 2021 saw 89 company insolvencies in Scotland, comprising of 14 compulsory liquidations, 54 CVLs and 4 administrations. There were no receiverships or CVAs. Overall, these statistics are approximately double to that of August 2020 and 13% higher than that of August 2019.
Historically, the number of company insolvencies registered in Scotland has been driven by compulsory liquidations but since April 2020, there have been over twice as many CVLS as compulsory liquidations.
Company Insolvencies (Northern Ireland)
In August 2021, there were 9 company insolvencies in Northern Ireland; comprising of 8 CVLs and 1 compulsory liquidation. There were no administrations, CVAs, or receiverships. The total figure here was over double than that in August 2020, but 59% lower than in August 2019.
Touching on individual insolvencies….
For UK figures, there were a total of 1,714 Debt Relief Orders (DROs) recorded in August 2021. This being 29% higher than in August 2020, but 12% lower than in August 2019. Note that as of 29 June 2021 some changes occurred to DRO eligibility which may have a part to play.
There were 614 bankruptcies for England and Wales in August 2021, just 6 less than what was recorded for July 2021. The records are made up of 550 debtor applications and 64 creditor petitions. In total, for the month, it is the lowest in the series dating back to January 2019.
Compared to August 2020, bankruptcies were 22% lower, with debtor applications 22% lower and creditor petitions 24% lower. When looking at 2019, figures were 54% lower for total bankruptcies, 50% lower for debtor applications and 73% lower for creditor petitions.
The decrease in bankruptcies is thought to be driven by a fall in debtor applications, this being 37% lower. The enhanced Government financial support for individuals and businesses since COVID-19 emerged has contributed to these falls.
It was also found that there were 7,021 individual voluntary arrangements (IVAs) registered, on average, during the three months ending August 2021. This figure is 44% higher than the three-month period ending August 2020 and 4% higher than that ending August 2019.
When looking at the figures for Northern Ireland, August 2021 saw 148 individual insolvencies, 38% higher than in August 2020, but 28% lower than in August 2019. This consisted of 127 IVAs, 15 DROs and 6 bankruptcies.
Find the full publication of statistics here.