The Insolvency Service publish the fourteenth 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 May 2021 there was a total of 1,011 registered company insolvencies across England and Wales, further broken down as follows:
- 930 creditors voluntary liquidations (CVLs) – 18% higher to that in May 2020 and 3% lower to May 2019
- 43 administrations – 61% lower to that in May 2020 and 55% lower than in May 2019
- 31 compulsory liquidations – 6% lower to that in May 2020 and 89% lower to May 2019
- 6 company voluntary arrangements (CVAs) –50% lower to that in May 2020 and 55% lower to May 2019
- 1 receivership appointment
These figures are 7% higher than that in the same month the previous year and 25% lower than that in the same month two years before (pre-pandemic).
Note: between 26 June and 31 May 2021, four companies were granted a moratorium and nine had restructuring plans sanctioned by the court. These new procedures were created by the Corporate Insolvency and Governance Act 2020.
Company Insolvencies (Scotland)
May 2021 saw 51 company insolvencies in Scotland, comprising of 8 compulsory liquidations, 37 CVLS, 5 administrations and 1 CVA. There were no receiverships. Overall, these statistics are higher by 46% than that of May 2020, but lower by 35% to that of May 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 twelve out of fourteen subsequent months.
Company Insolvencies (Northern Ireland)
In May 2021, there were 7 company insolvencies in Northern Ireland; comprising of 6 CVLs, 1 compulsory liquidation and no administrations, CVAs or receiverships. The total figure here was 40% higher than in May 2020 but 83% lower than May 2019.
Touching on individual insolvencies….
For UK figures, they were relatively low in May 2021 with 1,525 Debt Relief Orders (DROs) and 718 bankruptcies (made up of 647 debtor applications and 71 creditor petitions). Compared to May 2020, DRO numbers were similar but 33% lower than in May 2019.
Bankruptcies were 3% lower than in May 2020 due to a drop in debtor applications. Creditor petitions were higher by 39%. When comparing to May 2019, total bankruptcies were 50% lower; debtor applications 44% lower and creditor petitions 76% 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 7,393 individual voluntary arrangements (IVAs) registered, on average, during the three months ending May 2021. This figure is similar to both of the three-month average observed in the period ending May 2020 and May 2019.
When looking at the figures for Northern Ireland, May 2021 saw 194 individual insolvencies, 120% higher than in May 2020 and 18% lower than in May 2019. This consisted of 156 IVAs, 26 DROs and 12 bankruptcies.
Find the full publication of statistics here.