Monthly insolvency statistics – June 2023

A snapshot of corporate and personal insolvencies across the UK in June 2023.

Corporate Insolvencies

England and Wales

A total of 12,360 companies entered into a formal insolvency procedure between 1 January 2023 and 30 June 2023.  A lesser total of 8,760 companies entered into similar procedures in the same time period in 2019.  This represents a 41% increase when comparing the two 6-month periods.

Liquidations account for 93% of the total as opposed to 87% in 2019.  This shift could be indicative of an inability for companies and the businesses they operate to restructure through an Administration and the only alternative being a cessation of business and loss of the economic enterprise.

Corporate insolvencies in June 2023 totalled 2,163 and were 27% higher than June 2022 and 48% higher than June 2019.

 Creditors Voluntary Liquidations (“CVLs”) totalled 1,759, 21% higher than June 2022 and 75% higher than June 2019.

 Compulsory Liquidations (“WUCs”) totalled 260, 77% higher than June 2022 but 51% lower than June 2019.

There were 130 Administration appointments which is 44% higher than June 2022 but 13% lower than Jun 2019. 

There were 14 CVAs in June 2023, 75% higher than June 2022 but 60% lower than June 2019.

Scotland

In June 2023 there were 113 company insolvencies registered in Scotland, 51% higher than the number in June 2022. This was comprised of 36 compulsory liquidations, 72 CVLs and five administrations. There were no receivership appointments or CVAs.

Northern Ireland

In June 2023 there were 14 company insolvencies registered in Northern Ireland,44% lower than June 2022.

This was comprised of 11 CVLs, two compulsory liquidations and one CVA. There were no administrations or receivership appointments.

Personal Insolvencies

England and Wales

Personal insolvency numbers remain on a slow upward curve, as interest rates hit a 15-year high and the cost-of-living crisis continues to take effect. Personal insolvencies are almost certain to continue this trend into the second half of 2023 but remain quite volatile month to month.

There were 7,936 Breathing Space (BS) applications in June, against the usual monthly average of around 5,900. This trend might be a significant indicator of things to come.

With clamping down on poor advice and better signposting by the regulated debt advice sector, we expect the BS monthly figure to show a continued steady upward trend. As BS is merely a pause in the debt settlement process, it would not be surprising to also see the DRO, bankruptcy and IVA numbers rise once the BS period expires for these individuals.

June’s Mental Health BS application figure of 111, given the stringent entry criteria, is another significant indicator as to the nation’s wider mental health debt crisis.

There were 6,026 Individual Voluntary Arrangements (IVA’s) on average in the 3-month period to June, which is significantly lower than the three-month period ending June 2022.

The FCA have banned fees being paid to debt packaging companies, with the impact on IVAs already taking effect. There were 5,156 registered IVA’s in June, against 6,840 in May. It will be interesting to see whether this ban, coupled with the increased BS applications continue to drive the IVA figures downwards in the coming months as better, regulated advice begins to take effect.

In 2019, there were 2,289 Debt Relief Orders (DRO’s) a month on average, and following the changes in entry criteria from June 2021, surprisingly they have only averaged around 2,000 per month. The June figure of 2,320 might suggest a slight uptick in DRO’s.

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 580 bankruptcies, made up of an average of 471 debtor’s applications and 109 creditor petitions per month.

In June, there were 643 bankruptcies, against a 2022 average of 557 per month. We expect the bankruptcy numbers to steadily pick up, showing a more marked increase into the second half of the year.

Bankruptcy petitions will undoubtedly have to be issued by creditors to recover debts incurred during and since the pandemic, as a result of current economic pressures. In June, there were 122 creditors’ petitions, which is slightly up on the preceding 12 months’ average.

We expect to see creditor-driven bankruptcies begin to steadily increase further in the second half of 2023, led by HMRC in the recovery of unpaid tax liabilities. The volume of bankruptcy petitions will be driven by resource availability at HMRC, and by the ability of the Court system to manage them.

Northern Ireland

In June 2023 there were 160 individual insolvencies in Northern Ireland, 19% higher than in June 2022. This consisted of 110 IVAs, 14 DROs and 36 bankruptcies.