Monthly insolvency statistics – March 2023

Corporate Insolvencies

England and Wales

Corporate insolvencies in March 2023 were higher than the comparative months for both pre and post pandemic periods.  The rise in formal procedures continues this monthly trend.  In March 2023 company insolvencies totalled 2,457.  This was 16% greater than March 2022 and 1.5 times greater than March 2019 (pre pandemic).

 

Creditors Voluntary Liquidations (“CVLs”) totalled 2,011, 9% higher than March 2022 and 77% higher than in (pre pandemic) March 2019.

Compulsory Liquidations (“WUCs”) totalled 288, twice as many as March 2022 and 21% higher than March 2019. 

There were 145 Administration appointments which is 12% higher than March 2022 but 17% lower than pre pandemic levels.  

There were 13 CVAs in March 2023, 44% higher than March 2022 but 55% lower than March 2019.

Scotland

In March 2023 there were 104 company insolvencies registered in Scotland, 21% higher than March 2022 and 7% higher than March 2019. There were 40 compulsory liquidations, 61 CVLs, 2 administrations and 1 Receivership in the month. There were no CVA appointments.

Northern Ireland

In March 2023 there were 12 company insolvencies registered in Northern Ireland, 40% lower than March 2022 and 2.5 times lower than March 2019. This is comprised of 8 CVLs, 2 compulsory liquidations and 2 administrations.  There were no receiverships or CVAs.

Personal Insolvencies

England and Wales

Personal insolvency numbers are now beginning to show signs of increasing, as job losses and the cost-of-living crisis take effect. Personal insolvencies are almost certain to show a more marked increase into the second half of 2023.

Breathing Space (BS) applications climbed significantly in March, with 8,282 against the usual monthly average of around 5,700. 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 into 2023. As BS is merely a pause in the debt settlement process, it would not be surprising to see the DRO, bankruptcy and IVA numbers rise once the BS period expires for these individuals.

Notably, March’s Mental Health BS figure of 172 is the highest since inception, and given the stringent entry criteria, is another significant indicator as to the nation’s wider mental health crisis.

There were only 6,100 Individual Voluntary Arrangements (IVA’s) on average in the 3-month period to March, which is slightly below the usual 6,700 per month.

It will now be interesting to see whether the increased BS applications do now drive the IVA figures downwards 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 1,980 per month. The March figure of 3,383 might suggest a significant uptake in DRO’s but some organisational changes in the administration of DRO’s in February may be the true reason for this month’s spike in registrations.

A “new” 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 562 bankruptcies, made up of 462 debtor’s applications and 100 creditor petitions per month.

In March, there were 672 bankruptcies, against a 2022 average of 557 per month. We expect the bankruptcy numbers to steadily pick up during 2023, 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 the pandemic, and as a result of current economic pressures. In March, there were 107 creditors’ petitions, which is on par with the preceding 12 months’ average. We do expect to see creditor-driven bankruptcies begin to increase in 2023.

Northern Ireland

In March 2023 there were 176 individual insolvencies in Northern Ireland, 26% lower than in March 19 but 1% higher than March 2022. This consisted of 131 IVAs, 27 DROs and 18 bankruptcies.