Monthly insolvency statistics – May 2022

Corporate Insolvencies

England and Wales

Total corporate insolvencies in April were 1,817.  This is a slight reduction on April’s figures and is 79% higher than May 2021 (whereas April 2022 was more than double April 2021). Although there is a small reduction in corporate insolvencies, the figure is still 34% higher than May 2019 (a year before the COVID pandemic).  The statistics published by the Insolvency Service continue to show a return to insolvency levels in excess of pre-pandemic levels. A “wave” of insolvencies has been threatened for a while and it has been starting to look as if that had arrived, although perhaps May 2022 statistics have shown a slight ebb in the tide.

Creditors Voluntary Liquidations (“CVLs”) totalled 1,584 and were 70% higher than May 2021 and 66% higher than in (pre-Pandemic) May 2019. These CVL statistics are broadly in line with the overall corporate insolvency position.

Compulsory Liquidations (“WUCs”) (135) continue to be significantly lower (50%) than they were pre-Pandemic but 4 times higher when compared to May 2021. May 2022 saw 42% more WUCs than April 2022.

Administrations totalled 84 which is 95% higher than in May 2021 but 12% lower than pre-pandemic levels.  May 2022 saw a 26% decrease in administrations compared to April 2022. 

CVAs remain at low levels with 14 registered in May 2022, this was more than double May 2021 but 55% lower than May 2019.  The increase in corporate insolvencies continues to be driven by Liquidations, perhaps reflecting the difficult trading conditions, rising costs and economic uncertainty ahead.

Scotland

In May 2022 there were 93 company insolvencies registered in Scotland, 82% higher than May 2021 and 19% higher than in May 2019. This was comprised of 19 compulsory liquidations, 68 CVLs, and six administrations. There were no CVAs or receivership appointments. 

Northern Ireland

In May 2022 there were 20 company insolvencies registered in Northern Ireland, 2.6 times as many as in May 2021, but 50% lower than May 2019. This was comprised of three compulsory liquidations and 17 CVLs. There were no administrations, CVAs or receivership appointments.

Personal Insolvencies

England and Wales

Personal Insolvency numbers continue to show some interesting trends as we move out of the pandemic.

In May, Debt Relief Orders (DROs) were slightly above the 2021 average of around 1,700 per month, with a May figure of 2,030. Following the changes in criteria, allowing easier entry into a DRO from June 2021, are starting to be reflected in the upturn in the monthly figures.

A “new” DRO would have previously been a bankruptcy and therefore, the continued dip in bankruptcy numbers is no real surprise. In May, there were only 566 bankruptcies, which was 23% lower than in May 2021, against an average of around 800 per month during the pandemic.

Bankruptcies are at historical lows and the decrease in debtors making their own application in May (around 497 opposed to pandemic levels of 700 per month) is a result of those who are now eligible to choose a DRO instead.

However, there is a queue of creditors waiting to issue bankruptcy petitions and these will be processed through the Court system over the coming months into next year. We do expect to see creditor-driven bankruptcies begin to close the deficit in bankruptcy numbers generally created by those debtors now choosing a DRO. However, this month there were only 69 creditors’ petitions, which is still down on recent averages.

There was a three-month average of 7,812 Individual Voluntary Arrangements (IVA’s) recorded in May, which is similar to pre-pandemic levels. IVA’s have fluctuated between around 6,300 and 7,800 IVA’s registered per month.

Northern Ireland

In May 2022 there were 144 individual insolvencies in Northern Ireland, 26% lower than in May 2021, and 39% lower than May 2019. This consisted of 128 IVAs, eight DROs and eight bankruptcies.

Breathing Space

Since the launch of the Breathing Space (BS) legislation, there have been 46,407 registrations (averaging 5,156 per month), with 45,710 Standard BS and 697 Mental Health. BS registrations.

Breathing Space (BS) applications have hovered around 5,000 per month since inception in May 2021. May 2022 saw a slight upturn from recent months in the Standard BS figures to 5,638 applications, and the 111 Mental Health BS applications were also slightly up from the previous average of around 80 per month. BS is still showing no signs of producing the predicted users, but it is providing a useful mechanism to pause and take stock, which is its very purpose.

With fuel and energy prices still volatile and the cost-of-living crisis beginning to take effect, the number of personal insolvencies nationally are almost certain to continue to rise in the coming months and we expect a more marked increase in the next seven months than the first five months of this year.