The Insolvency Service publish the fifteenth 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 June 2021 there was a total of 1,207 registered company insolvencies across England and Wales, further broken down as follows:
- 1,116 creditors voluntary liquidations (CVLs) – twice the amount in June 2020 and 11% higher than in June 2019
- 39 administrations – 61% lower to that in June 2020 and 74% lower than in June 2019
- 38 compulsory liquidations – 46% lower to that in June 2020 and 86% lower to June 2019
- 14 company voluntary arrangements (CVAs) –the exact same amount as in June 2020 but 60% lower than in June 2019
- No receivership appointments
These figures are 63% higher than that in the same month the previous year and 18% lower than that in the same month two years before (pre-pandemic). The overall reduction in company insolvencies compared to June 2019 was thought to be due to a lower amount of company liquidations.
Note: between 26 May and 30 June 2021, five 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)
June 2021 saw 77 company insolvencies in Scotland, comprising of 14 compulsory liquidations, 62 CVLs and 1 administration. There were no receiverships or CVAs. Overall, these statistics are higher by 46% than that of June 2020, but lower by 35% to that of June 2019.
Historically, the number of company insolvencies registered in Scotland has been driven by compulsory liquidations but since March 2020, there have been more CVLs registered compared to compulsory liquidations, for thirteen out of fifteen subsequent months.
Company Insolvencies (Northern Ireland)
In June 2021, there were 11 company insolvencies in Northern Ireland; comprising of 9 CVLs, 1 compulsory liquidation and 1 administration. There were no CVAs or receiverships. The total figure here was 22% higher than in June 2020 but 62% lower than June 2019.
Touching on individual insolvencies….
For UK figures, they were relatively low in June 2021 with 1,410 Debt Relief Orders (DROs) and 735 bankruptcies (made up of 645 debtor applications and 90 creditor petitions). Compared to June 2020, DRO numbers were 21% lower and then 33% lower than in June 2019. Note there was changes in place for DRO eligibility but this occurred from 29th June 2021. For this reason it is not visible in the publication for this month but may be visible going forward in later publication editions.
Bankruptcies were 17% lower than in June 2020 due to a drop in debtor applications. Creditor petitions were higher by 27%. When comparing to June 2019, total bankruptcies were 44% lower; debtor applications 37% lower and creditor petitions 67% lower.
The decrease in bankruptcies is thought to be driven by a fall in debtor applications. 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 7,184 individual voluntary arrangements (IVAs) registered, on average, during the three months ending June 2021. This figure is 15% lower than the three-month period ending June 2020 and 11% higher than that ending June 2019.
When looking at the figures for Northern Ireland, June 2021 saw 163 individual insolvencies, 40% lower than in June 2020 and 15% lower than in June 2019. This consisted of 130 IVAs, 19 DROs and 14 bankruptcies.
Find the full publication of statistics here.