Covid-19 Pandemic Insolvency Numbers

The expected tsunami of insolvencies has not (as yet) materialised. Whilst the overall trend appears down, Creditors Voluntary Liquidations appear to be making a bit of a comeback.

Overview Of UK Company Insolvencies

We can see that the trend is not that of the expected tsunami of insolvencies. Perhaps UK Plc is stronger than many might have thought.

Main Messages for England and Wales – Covid-19 Pandemic Insolvency Numbers

The number of registered company insolvencies in July 2021 was 1,094:

• 13% higher than the number registered in the same month in the previous year (965 in July 2020), but
• 24% lower than the number registered two years previously (pre-pandemic; 1,442 in July 2019).

UK Covid-19 Pandemic Insolvency Numbers

The largest component of UK insolvencies is UK Liquidations:

In July 2021 there were 1,007 Creditors’ Voluntary Liquidations (“CVLs”), which was similar to pre-pandemic levels.

The overall reduction in company insolvencies compared to July 2019 was driven mostly by the lower number of compulsory liquidations.

For individuals, 620 bankruptcies were registered, which was 34% lower than July 2020 and 58% lower than July 2019.

Numbers of Debt Relief Orders (“DROs”) in July 2021 were at their highest level since the start of the pandemic, with 1,864 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 15% higher than July 2020 but remained lower than pre-pandemic levels (22% lower than in July 2019).

There were, on average, 6,841 Individual Voluntary Arrangements (“IVAs”) registered per month in the three-month period ending July 2021, which is 7% lower than both the three-month period ending July 2020 and the three-month period ending July 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 31 July 2021, there were 17,297 registrations, comprised of 17,098 Standard breathing space registrations and 199 Mental Health breathing space registrations.

Since the start of the first UK lockdown as a response to the coronavirus (COVID-19) pandemic in March 2020, overall numbers of company and individual insolvencies have remained low when compared with pre-pandemic levels. 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.

The Insolvency Service does not record whether an insolvency is directly related to the coronavirus pandemic, it is not possible to state the direct effect of the pandemic on insolvency volumes.

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Disclaimer: Covid-19 Pandemic Insolvency Numbers

This page: Covid-19 Pandemic Insolvency Numbers is not legal advice and should not be relied upon as such. This article Covid-19 Pandemic Insolvency Numbers 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. The data source has been obtained from the goverment insolvency statistics website.