fbpx Skip to main content

In September 2021 There Were 1,328 Creditors’ Voluntary Liquidations

Company insolvencies rocket to the highest levels since Covid-19 took hold over the UK. The number of registered company insolvencies in September 2021 was 1,446:

  • 56% higher than the number registered in the same month in the previous year (928 in September 2020), but
  • 4% lower than the number registered two years previously (pre-pandemic; 1,510 in September 2019).

In September 2021 there were 1,328 Creditors’ Voluntary Liquidations (CVLs), which is the highest level seen in the series since January 2019. The number of registered company insolvencies was similar to pre-pandemic levels, driven by this higher number of CVLs, although other types of company insolvencies, such as Compulsory Liquidations, remained lower.

Insolvencies Rocketing To Highest Levels

For individuals, 614 bankruptcies were registered, which was 42% lower than September 2020 and 55% lower than September 2019.

Numbers of Debt Relief Orders (DROs) in September 2021 were at their highest level since the start of the pandemic, with 2,150 DROs registered, following changes to the eligibility criteria on 29 June including an increase in the level of debt at which people can apply for a DRO from £20,000 to £30,000. The number of DROs registered was 41% higher than September 2020 but remained lower than pre-pandemic levels (12% lower than in September 2019).

There were, on average, 6,853 IVAs registered per month in the three-month period ending September 2021, which is 48% higher than the three-month period ending September 2020 and 9% lower than the three-month period ending September 2019.

Note that the IVA series is historically volatile as it is based on date of registration at the Insolvency Service.

Between the launch of the Breathing Space scheme on 4 May 2021, and 30 September 2021, there were 27,246 registrations, comprised of 26,896 Standard breathing space registrations and 350 Mental Health breathing space registrations.

During the coronavirus (COVID-19) pandemic overall numbers of company and individual insolvencies have remained low when compared with pre-pandemic levels. While CVL numbers are now slightly higher than pre-pandemic levels, numbers for other insolvency procedures, such as compulsory liquidations for companies and bankruptcies for individuals, remain lower. This is likely to be partly driven by government measures put in place to support businesses and individuals during the pandemic, including:

  • Temporary restrictions on the use of statutory demands and certain winding-up petitions (leading to company compulsory liquidations).
  • Enhanced government financial support for companies and individuals.

Bank of England Financial Policy Summary and Record

The Bank of England Financial Policy Summary and Record dated 8 October 2021 said:

The increase in debt in the UK corporate sector has been concentrated in some sectors and types of businesses, in particular in small and medium-sized enterprises (SMEs). Many of these SMEs had not previously borrowed and some would not have previously met lenders’ lending criteria. The increase in debt – though moderate in aggregate – has likely led to increases in the number and scale of more vulnerable businesses. As the economy recovers and Government support, including restrictions on winding up orders, falls away, business insolvencies are expected to increase from historically low levels.

Observation: Company Insolvencies Rocket To Highest Levels Since Covid-19 Took Hold

Oliver Elliot’s CEO, Elliot Green says in response to these latest statistics:

This increase in the number of company insolvencies is very worrying. One has to bear in mind that corporate insolvencies are often triggered by the ability of creditors to issue winding up petitions and this ability to potentially place companies into Compulsory Liquidation.

We are seeing a rapid return to the pre-pandemic levels for Creditors’ Voluntary Liquidations and the anticipated surge in winding up petitions has not really yet gotten out of the starting blocks. It is therefore of serious concern that over the next few months we could see a critical rise in corporate insolvencies. This in turn could add the shortages that we may face as an econcomy. Supply chains could become subject to greater disruption.

Potentially, significant volumes of Bounce Back Loan defaults could also escalate. At Oliver Elliot we are certainly seeing a considerable number of companies with Bounce Back Loan repayment difficulties and defaults.

Company Directors concerned about their position and who wish to explore their options can contact us in the strictest of confidence.

Are you a Director of company?

If you are a Director of an insolvent company, Oliver Elliot can help you address your claim and concerns arising from the insolvency.

Find out how

What Next?

Expert Advice Is Just A Click Away

If you have any questions in relation to Company Insolvencies Rocket To Highest Levels Since Covid-19 Took Hold then contact us as soon as possible for advice. Oliver Elliot offers a fresh approach to insolvency and the liquidation of a company by offering specialist advice and services across a wide range of insolvency procedures.

Our expertise is at your fingertips.

By submitting this form you agree with the storage and handling of your data by Oliver Elliot. For more details, please read our Privacy Policy.

Disclaimer: Company Insolvencies Rocket To Highest Levels Since Covid-19 Took Hold

This page: Company Insolvencies Rocket To Highest Levels Since Covid-19 Took Hold is not legal advice and should not be relied upon as such. This article Company Insolvencies Rocket To Highest Levels Since Covid-19 Took Hold is provided for information purposes only. You can contact us on the specific facts of your case to obtain relevant advice via a Free Initial Consultation.

This page contains public sector information licensed under the Open Government Licence v3.0.

Elliot Green

Licensed Insolvency Practitioner & Chartered Accountant. We Know Insolvency Inside Out.

Share via
Copy link