The number of registered company insolvencies in February 2021 was 686, 49% lower than the number registered in the same month in the previous year (1,348 in February 2020). This is the lowest monthly number in this time series (since January 2019).
For individual insolvencies, the number of bankruptcies in February 2021 was 898, while the number of Debt Relief Orders was 1,389. Both were 42% lower than in February 2020. There were, on average, 6,138 IVAs registered per month in the three-month period ending February 2021, 11% higher than for the three-month period ending February 2020, although this series is volatile (see the Data Sources and Methodology section for more information).
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.
According to The Insolvency Service, the overall number of company insolvencies since the start of lockdown last year is likely to be impacted 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.
Company insolvency statistics for England and Wales – February 2021
Overall, the numbers of registered company insolvencies have remained low since the start of the first UK lockdown in March 2020, when compared with the same time period last year.
Total company insolvencies decreased in February 2021 when compared to February 2020. In February 2021, there were a total of 686 company insolvencies in England and Wales, which included:
- 591 creditors’ voluntary liquidations (CVLs)
- 33 compulsory liquidations
- 56 administrations
- 6 company voluntary arrangements (CVAs)
- 0 receiverships
When compared to February 2020, overall company insolvencies were 49 per cent lower in February 2021: Compulsory liquidations were 86 per cent lower, CVLs were 38 per cent lower, there were 68 per cent fewer CVAs and administrations were 62 per cent lower.
Individual insolvency statistics for England and Wales – February 2021
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 February 2021 when compared to the same month last year, while IVAs were higher than the rolling three-month average observed in the period ending February 2020. In February 2021, there were:
- 6,138 IVAs registered (using a three-month rolling average)
- 1,389 DROs
- 898 bankruptcies (813 debtor bankruptcies and 85 creditor bankruptcies)
Debt relief orders and bankruptcies
There was a 42 per cent reduction in both DROs registered and bankruptcies when compared to February 2020. The reduction in bankruptcies was driven by a 40 per cent fall in debtor bankruptcies and a 59 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 February 2021 were 11 per cent higher when compared to the average number of registered IVAs during each of the three months ending February 2020.
It should be noted that one IVA provider experienced technical issues between December 2019 and March 2020 which resulted in IVAs not being registered with the Insolvency Service on a timely basis. This meant the number of IVAs registered in the three-months ending February 2020 was artificially low.
Company insolvency statistics for Scotland – February 2021
The Accountant in Bankruptcy, Scotland’s Insolvency Service, administers company insolvency in Scotland. They reported that in February 2021 company insolvencies in Scotland decreased when compared to January 2020.
There were 26 company insolvencies in total, a decrease of 70 per cent when compared to February 2020. Total corporate insolvencies in Scotland in February 2021 consisted of:
- 7 compulsory liquidations
- 16 CVLs
- 2 administrations
- 1 CVA
- 0 receivership appointments
Company and individual insolvency statistics for Northern Ireland – February 2021
In Northern Ireland in February 2021 there were:
- 5 company insolvencies
- 144 individual insolvencies
Companies insolvencies fell by 81 per cent when compared to February 2020 and consisted of 5 CVLs. There were no compulsory liquidations, CVAs, administrations or administrative receiverships.
Individual insolvencies were down 46 per cent from February 2020 and consisted of:
- 107 IVAs
- 27 DROs
- 10 bankruptcies
We publish a summary of the reports here each month. For advice relating to support, insolvency or recovery options, please contact us.
* This content and data was reported in full in the Insolvency Service Statistics for February 2021 published 16th March 2021 – see the full report here: Monthly Insolvency Statistics February 2021 – GOV.UK (www.gov.uk)
Image source: The Insolvency Service Monthly insolvency statistics
Next insolvency statistics release
Individual and company insolvency statistics for March 2021 will be released on 15 April 2021.