Monthly insolvency statistics – June 2024

Corporate Insolvencies

England and Wales

In England and Wales, the number of company insolvencies in June were a 16% jump on the previous month, but they were consistent when compared to the average figures for the previous 6,12 and 18 months. It is only when the current 3-month period, the second quarter of the year, is compared to the first quarter of the year, that a significant 13.4% increase is seen. With the current pressure on the cost of living, muted consumer spending and high interest rates, it remains to be seen whether the easing inflationary pressure combined with an anticipated greater level of political and economic stability following the recent general election, starts to feed through into fewer companies becoming insolvent.

The rate of insolvency as a percentage of companies on the Register, is still below that seen in the 2008-2009 recession. Notwithstanding this, companies would welcome a cut in interest rates and an easing of financial pressures.

The rise in company insolvencies in June 2024 was across the board, with a 30% increase in administrations, a 16% increase in creditors’ voluntary liquidations (CVLs), a 10% increase in compulsory liquidations and a 21% increase in company voluntary arrangements (all on prior month). Continuing the recent trend, the three industries with the highest number of insolvencies in June 2024 are construction, wholesale and retail trade, and accommodation.

 Creditors Voluntary Liquidations (“CVLs”) totalled 1,866, 16% higher than June 2023.

Compulsory Liquidations (“WUCs”) totalled 302, 19% higher than June 2023.

There were 170 Administration appointments, 22% higher than June 2023. 

There were 23 Company Voluntary Arrangements (“CVA”s) which was 64% higher than June 2023. 

Scotland

In June 2024, 109 company insolvencies in Scotland represented a decrease on the prior month. A slight increase can be seen in compulsory liquidations although CVLs have continued or an approximate average (with monthly variations) since around June 2021.

Northern Ireland

In June 2024 there were 17 company insolvencies registered in Northern Ireland, 13% higher than June 2023. This is comprised of 7 CVLs, 8 compulsory liquidations, 1 CVA and 1 Administration.  There were no receivership appointments.

Personal Insolvencies

England and Wales

There were 10,395 individual insolvencies in June, an increase of 33% on June 2023 (7,819) and a marked spike on the intervening monthly average.

This trend was driven by Debt Relief Orders (DRO’s), with a new record of 4,383, a huge 79% increase from the same month last year (2,453).

These DRO’s follow the removal of the £90 administration fee in April 2024 and the entry criteria of having liabilities of £30,000 or less, increasing to £50,000 from 24 June 2024. Expect July to give us a new record number of DRO’s.

The permitted car value has also doubled, effective from 28 June 2024. Previously if your car was worth more than £2,000, you would not be eligible for a DRO, however, this is now £4,000. There have been some issues with the second-hand car market being so buoyant, meaning that modest car values are sometimes struggling to come in below £4,000, but that does not seem to have dampened the number of applications.

With DRO’s now increasingly being the debt solution of choice for many, bankruptcy numbers have deceased, with the total number of bankruptcies in June (651), being slightly lower than the last 12-month average (671), and still significantly lower than pre-covid levels.

In June, there were 158 creditor petitions, with HMRC leading the push on filing petitions, showing a slight increase on the previous 12-month average of 149.

Debtor’s bankruptcy applications reached 493 in June, compared to 520 in the same month last year. Debtor’s applications have remained steady in 2024, with the monthly average of 521 to date this year. Obviously, many of those with liabilities between £30,000 and £50,000 will now turn to DRO’s and the debtor applications will decrease as a result.

 Individual Voluntary Arrangements (IVA) numbers over the past year have been significantly lower than during 2022, which saw a record annual number. However, 5,361 IVA’s were recorded in June, which is a 14% increase on the same month last year (4,712).

IVA’s which were previously sold inappropriately will now likely be replaced by DRO’s, which will see IVA numbers drop even further, as DRO’s continue to rise, and bankruptcy numbers remain constant.

In the last 12 months, 57% of insolvencies were IVA’s, 35% were DRO’s and 7% were bankruptcies. This means that more than one in three individual insolvencies were DRO’s, compared to one in four in the previous 12 months.

Breathing Space (BS) registrations in June 2024 reached 6,970, compared to 7,936 in June 2023, which is 12% lower. Registrations consisted of 96 Mental Health BS applications, and 6,874 Standard BS registrations.

BS applications appear to have levelled out, however, this procedure is merely a pause in the process and the individuals concerned will still have to deal with their indebtedness, although what course of action they take will remain to be seen.

The numbers suggest that those exiting a Breathing Space (BS) application are being sign-posted to a DRO as their chosen exit route once the BS period had expired.

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.

Given the recent threshold changes to DRO eligibility (£50,000 liabilities), creditors may have concerns that the process is susceptible to abuse. It will require careful monitoring by the authorities to ensure that creditors are protected from such abuse.

Scotland

The Accountant in Bankruptcy produces individual insolvency statistics on a quarterly basis. Therefore, the numbers in this section are only updated once every 3 months.

In Q1 2024, there were 1,884 individual insolvencies in Scotland, which was slightly lower than in Q1 2023. These were comprised of 1,281 trust deeds and 603 sequestrations, of which 343 were via the minimal asset process (MAP) route.

The table of sequestrations shown below contains all sequestrations with the numbers of MAPS separated out in the second table.

Northern Ireland

In June 2024, there were 126 individual insolvencies in Northern Ireland. This was 21% lower than in June 2023. There were 87 IVAs, 18 bankruptcies and 21 DROs.