Monthly insolvency statistics – January 2024

Corporate Insolvencies

England and Wales

Total corporate insolvencies in January were 1,769.  This is 5% higher than January 2023 (1685) and the Insolvency Service noted that it is 2% higher than January 2019 (a year before the COVID Pandemic).  

Creditors Voluntary Liquidations (“CVLs”) totalled 1,294 and were 6% lower than January 2023 and 11% higher than in (Pre-Pandemic) January 2019.

Compulsory Liquidations (“WUCs”) (339) were 66% higher than January 23 and 7% higher than January 2019.

Administrations totalled 120 which is 40% higher than in January 2023 but 39% lower than Pre Pandemic levels.  This is indicative evidence that the growth in insolvencies this month were fuelled by creditor driven action through winding up petitions and not voluntary restructuring.

CVAs remain at low levels with 16 registered in January 2024, this was 14% higher than January 2023 but 62% lower than January 2019. 

Scotland

In January 2024 there were 88 company insolvencies registered in Scotland, 19% lower than January 2023 and similar levels to January 2019. There were 34 compulsory liquidations, 46 CVLs, 7 administrations and 1 CVA. There were no receivership appointments.

Northern Ireland

In January 2024 there were 30 company insolvencies registered in Northern Ireland,114% higher than January 2023 and 88% higher than in January 2019. This is comprised of 17 CVLs, 8 compulsory liquidations, 2 administration and 4 CVAs.

Personal Insolvencies

England and Wales

The total number of individual insolvencies in January 2024 was 8,089, which was notably higher than the January 2023 figure of 7,756.

The total number of Breathing Space (BS) registrations in January 2024 reached 8,365, which is significantly higher than the figure of 7,585 in January 2023. Registrations consisted of 124 Mental Health BS, which is notably higher than 98 in January last year. Standard BS registrations showed a similar trend with a total of 8,232 in January 2024, compared to the 2023 average of 7,244.

The 2023 upward trend in BS applications looks to be continuing into 2024, however, this procedure is merely a pause in the process and the individuals concerned will still have to deal with their indebtedness once the BS has expired. What course of action they take will remain to be seen.

Plans to modernise the current Personal Insolvency framework could result in a single gateway to enable people to access independent, regulated debt advice, via a digital platform, or dovetailed with the current Breathing Space scheme, which may see the removal of barriers into appropriate and regulated insolvency procedures, providing a way out of debt, which will provide equally good outcomes.

IVA numbers have continued to steadily fall, with 4,528 recorded in January 2024 compared to 5,373 in January 2023. This number is significantly down from the monthly average of 5,336 in 2023.

Monthly IVA’s appears to have found a level, with 4,141 recorded in the 3-month average to January 2024. This is owing to improved advice, or rather the removal of poor advice as a result of the Financial Conduct Authority clamping down on debt packaging firms coupled with the Insolvency Service issuing guidance to Insolvency Practitioners (IPs).

Debt Relief Orders (DROs) in January 2024 increased significantly compared to January 2023, seeing a 60% increase. Following the changes in criteria in May 2021, allowing easier entry into a DRO, numbers have increased markedly.

This significant annual rise could be attributed to the habitual post-holiday spike in debt relief options being sought by individuals, and secondly by those people who would previously have been badly advised to undertake an inappropriate Individual Voluntary Arrangement (IVA). It is also likely to reflect those exiting a Breathing Space (BS) application and selecting a DRO as their chosen route. 

A current DRO would have previously been a no-asset bankruptcy and therefore, the record low bankruptcy numbers of 2021/22 were of no real surprise. The average monthly bankruptcy numbers in 2019 were 1,395, made up of 1,134 debtor’s applications and 261 creditor petitions.

The stark decrease from that period to the current numbers is clear against the last 12-month averages of  631 bankruptcies, made up of an average of 495 debtor’s applications and 136 creditor petitions per month.

A post-2021 DRO would have previously been a bankruptcy, and therefore bankruptcy numbers decreased in 2023 compared to 2022 numbers. However, the January 2024 figure of 768 bankruptcies, compared to 642 in January 2023 shows a marked increase, though still significantly lower than pre-covid levels.

The upward trend in bankruptcy petitions brought by creditors has continued, with HMRC leading the way. Creditor petitions have increased with a monthly average of 141 in 2023, compared to 95 in 2022. This is reflected in the January 2024 figure of 162 creditor petitions compared to 124 in January 2023.

This trend is mirrored in debtor’s bankruptcy applications, which reached 606 in January 2024 compared to 518 in the same month last year. This is the highest number of debtor’s applications since the summer of 2021, and may also be attributable to the aforementioned post-holiday debt relief rush.

Northern Ireland

In January 2024 there were 112 individual insolvencies in Northern Ireland, 7% lower than in January 2023. This consisted of 76 IVAs, 20 bankruptcies and 16 DROs.