The Insolvency Service publish the sixteenth 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.
Overall, the numbers of company and individual insolvencies remained low since the start of the first UK lockdown in March 2020, compared to pre-pandemic levels. This is likely to be driven by the 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.
Company Insolvencies (UK)
In July 2021 there was a total of 1,094 registered company insolvencies across England and Wales, further broken down as follows:
- 1,007 creditors voluntary liquidations (CVLs) – 70% higher than in July 2020 but the same as in July 2019
- 40 administrations – 78% lower to that in July 2020 and 73% lower than in July 2019
- 41 compulsory liquidations – 77% lower to that in July 2020 and 84% lower to July 2019
- 6 company voluntary arrangements (CVAs) –65% lower than in July 2020 and 73% lower than in July 2019
- No receivership appointments
These figures are 13% higher than that in the same month the previous year and 24% lower than that in the same month two years before (pre-pandemic). The overall reduction in company insolvencies compared to July 2019 was thought to be due to a lower amount of compulsory liquidations.
Note: between 26 June and 31 July 2021, thirteen companies (almost three times that of the month prior) 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)
July 2021 saw 72 company insolvencies in Scotland, comprising of 14 compulsory liquidations, 54 CVLs and 4 administrations. There were no receiverships or CVAs. Overall, these statistics are higher by 36% than that of July 2020, but lower by 26% to that of July 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 July 2021, there were 14 company insolvencies in Northern Ireland; comprising of 12 CVLs, 1 compulsory liquidation and 1 CVA. There were no administrations or receiverships. The total figure here was 40% higher than in July 2020 but 33% lower than July 2019.
Touching on individual insolvencies….
For UK figures, they were the highest seen since the start of the pandemic in terms of Debt Relief Orders (DROs) with 1,864 recorded in July 2021. This was 15% higher than in July 2020, but 22% lower than July 2019. Note that as of 29 June 2021 some changes occurred to DRO eligibility. There was 620 bankruptcies for England and Wales in July 2021, made of 534 debtor applications and 86 creditor petitions. Compared to July 2020, bankruptcies were 34% lower, yet creditor petitions were similar figures. When looking at 2019, figures were 58% lower for total bankruptcies, 54% lower for debtor applications and 71% 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 6,841 individual voluntary arrangements (IVAs) registered, on average, during the three months ending July 2021. This figure is 7% lower than the three-month period ending July 2020 and 7% lower than that ending July 2019.
When looking at the figures for Northern Ireland, July 2021 saw 142 individual insolvencies, 11% lower than in July 2020 and 28% lower than in July 2019. This consisted of 121 IVAs, 14 DROs and 7 bankruptcies.
Find the full publication of statistics here.