In response to the coronavirus (COVID-19) pandemic, the individual and company November 2020 insolvency statistics for England and Wales have been published by the Insolvency Service, together with related insolvency figures for Scotland and Northern Ireland
This monthly series supplements the Insolvency Service’s quarterly company and individual insolvency National Statistics to provide more up to date information, as the coronavirus (COVID 19) pandemic continues, on the numbers of companies and individuals who are unable to pay debts and enter a formal insolvency procedure.
These statistics present monthly numbers of individual and company insolvencies in England and Wales and Northern Ireland. For Scotland, only monthly company insolvency statistics are presented; monthly individual insolvency statistics for Scotland can be found on the Accountant in Bankruptcy (AIB) website.
Insolvency statistics for England and Wales following coronavirus lockdown
The Insolvency Service is releasing monthly company and individual insolvency statistics for England and Wales and Northern Ireland, as well as monthly company statistics for Scotland, throughout the remainder of the coronavirus (COVID-19) pandemic, and for a period thereafter.
However, these statistics are marked ‘experimental’ since the process of compiling insolvency data in monthly format is new to the statistics team at the Insolvency Service and is subject to review. The Insolvency Service also notes that as they do not record whether an insolvency is directly related to the coronavirus pandemic, as it is not possible to state its direct effect on insolvency volumes
All figures presented within this release are provisional and subject to review. Further detail can be found in the accompanying Monthly Statistics Methodology and Quality document. Historical data presented within this statistical release may not be consistent with the previously published quarterly company and individual insolvency National Statistics.
On 26 June 2020, the Corporate Insolvency and Governance Act 2020 came into force and introduced measures to relieve the burden on businesses during the coronavirus pandemic. These measures include a new moratorium to give companies breathing space from their creditors while they seek a rescue, and a new Companies Act procedure, known as a restructuring plan that allows companies to restructure unmanageable debt. These statistics provide the number of companies that have obtained a moratorium or have had a restructuring plan following the introduction of these measures
Company insolvency statistics for England and Wales – November 2020
Total company insolvencies decreased in November 2020 when compared to November 2019. In November 2020, there were a total of 889 company insolvencies in England and Wales, which included:
- 767 creditors’ voluntary liquidations (CVLs)
- 34 compulsory liquidations
- 73 administrations
- 15 company voluntary arrangements (CVAs)
- 0 receiverships
The overall number of company insolvencies decreased by 41 per cent in November 2020, when compared to the same month last year. This was primarily driven by a decrease in the numbers of CVLs and compulsory liquidations which fell by 28 per cent and 88 per cent respectively. There was also a 51 per cent decrease in the numbers of administrations and a 29 per cent decrease in the number of CVAs when compared to the same month last year.
According to The Insolvency Service, the overall reduction in company insolvencies was likely to be, in part, driven by the range of government measures put in place to financially support companies in response to the coronavirus pandemic, including the Corporate Insolvency and Governance Act.
Individual insolvency statistics for England and Wales – November 2020
As individual voluntary arrangement (IVA) numbers have been calculated using different methodology, they are presented separately to debt relief orders (DROs) and bankruptcies.
Overall DROs and bankruptcies decreased in November 2020 when compared to the same month last year, while IVAs were slightly higher than the rolling three-month average observed in the period ending November 2019. In November 2020, there were:
- 7,057 IVAs registered (using a three-month rolling average)
- 1,425 DROs
- 927 bankruptcies (836 debtor bankruptcies and 91 creditor bankruptcies)
Debt relief orders and bankruptcies
There was a 38 per cent reduction in DROs registered when compared to November 2019, while bankruptcies also fell by 32 per cent when compared to the same month as last year. The reduction in bankruptcies was driven by a 26 per cent fall in debtor bankruptcies and a 60 per cent reduction in creditor bankruptcies.
The fall in DROs and debtor bankruptcies corresponds with a reduction in applications for these services, which coincided with the announcement of enhanced government financial support for individuals and businesses since the emergence of the coronavirus pandemic. The fall in creditor bankruptcies will likely have been a result of reduced HMRC enforcement activity during this period and in part, a result of reduced operational running of the courts during this time.
Individual voluntary arrangements
Due to volatile data, the Insolvency Service provided three-month rolling averages for IVAs, which indicate what the overall trend of IVA registrations might look like. Using the three-month rolling average, IVAs in November 2020 were 3 per cent higher when compared to the average number of registered IVAs during each of the three months ending November 2019.
It is noted that the three-month rolling averages should be used to consider potential changes in IVA trends over time, and both sets of numbers should be used with caution.
Company insolvency statistics for Scotland – November 2020
The Accountant in Bankruptcy, Scotland’s Insolvency Service, administers company insolvency in Scotland. They reported that in November 2020 company insolvencies in Scotland decreased when compared to November 2019.
There were 46 company insolvencies in total, a decrease of 47 per cent when compared to November 2019. Of the 46 total insolvencies in Scotland in November 2020, there were:
- 13 compulsory liquidations
- 26 CVLs
- 7 administrations
- 0 receiverships
- 0 CVAs
Company and individual insolvency statistics for Northern Ireland – November 2020
In Northern Ireland in November 2020 there were:
- 7 company insolvencies
- 91 individual insolvencies
Companies insolvencies fell by 77 per cent when compared to November 2019 and consisted of 5 CVLs, 1 administration and 1 CVA. There were no compulsory liquidations or administrative receiverships.
Individual insolvencies were down 68 per cent from November 2019 and consisted of 52 IVAs, 17 DROs and 22 bankruptcies.
Interpretation of these statistics
Please note that some caution needs to be applied when interpreting these statistics. Notably:
- The emergence of the coronavirus pandemic may have had at least some effect on the timeliness of insolvency registration, particularly since the UK lockdown applied by government on 23 March 2020 resulting, in the short term, in insolvency practitioners, intermediaries, Companies House and courts not being able to process insolvencies in the usual manner.
- The underlying monthly data have not been seasonally adjusted and therefore comparisons over time may not be valid.
- Due to the volatility of the underlying data on registered individual voluntary arrangements (IVAs), three-month rolling averages have also been presented to smooth out the data. However, neither counts or three-month rolling-averages are reliable enough to constitute short-term IVA trends.
We publish a summary of the reports here each month. For advice relating to support, insolvency or recovery options, please contact us.
Image source: The Insolvency Service Monthly insolvency statistics, November 2020