Monthly insolvency statistics – November 2023

Corporate Insolvencies

England and Wales

November 2023 continued the trend of higher company insolvency levels than last year, with 2,466 company insolvencies (21% higher than November 2022). Insolvency levels seem to be settling at a level around 2,200 per month (over the last 7 months), which is 53% higher than the same 7 months prior to the pandemic. This shouldn’t be a surprise when we consider the pressures facing companies since the combined headwinds of Brexit, Covid-19 and inflationary pressures. It may be many months before we start to see a decline in companies entering insolvency.

Creditors’ Voluntary Liquidations at 1,962 continue to trend at high levels, after a dip in the summer they are now back to virtually double the number seen in the same month of 2019, and 23% higher than in November 2022.

The biggest jump is seen in compulsory liquidations at 359, which was 38% higher than the prior month and 22% higher than November 2022. The backlog of winding up petitions appears to be getting addressed, with levels now at a similar position compared to the same 7 months in 2019. This figure could be expected to rise slightly going forward but may be tempered by court backlogs.

 The number of administrations reduced slightly to 133, which is 1% lower than in 2022.

The combination of rising liquidation numbers and falling administrations is interesting as it indicates a deterioration in the more positive outcomes of insolvency, with fewer jobs and businesses being saved with more businesses simply closing their doors.

After a brief rally in CVA numbers in October 2023, the November figures are more in line with the trend of the prior few months, which is much lower than the numbers seen before the Covid pandemic. We have already discussed the reasons for this in prior releases, and we think we will continue to see the same effect.

Scotland

In November 2023 there were 109 company insolvencies registered in Scotland, 8% lower than the number in November 2022. This was comprised of 30 compulsory liquidations, 74 CVLs and 5 administrations. There were no CVAs or receivership appointments.

Historically, the volume of company insolvencies registered in Scotland has been driven by compulsory liquidations. However, between April 2020 and March 2022, approximately three times as many CVLs as compulsory liquidations were registered. In the first eleven months of 2023, CVL numbers remained more than 1.5 times higher than compulsory liquidation numbers.

Northern Ireland

In November 2023 there were 26 company insolvencies registered in Northern Ireland, 30% higher than November 2022. This was comprised of 6 CVLs, 13 compulsory liquidations, 5 administrations and 2 CVAs. There were no receivership appointments.

Personal Insolvencies

England and Wales

Personal insolvency numbers have been on a slow upward curve since the pandemic, driven by interest rate hikes and the cost-of-living crisis.

Monthly analysis on the numbers will show volatile swings, driven largely by the rollercoaster Individual Voluntary Arrangements (IVA’s) numbers, which continue their descent to below 5,000 a month in November, compared with their recent 7,000-a-month average. In contrast, Debt Relief Orders in the same period continued their ascent.

There were 7,484 Breathing Space (BS) registrations in November, which is significantly higher than the number registered in November 2022 (6,796). November’s Mental Health BS application figure of 133, is also an increase on the 12-month average.

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, once the BS period expires, it would be useful to analyse the outcomes for these individuals.

There were only 4,292 Individual Voluntary Arrangements registered in November (7,648 in November 2022), which is one of the lowest months since the onset of the pandemic. As better regulated advice begins to take effect, coupled with the increased BS and DRO applications, IVA numbers so far in 2023 have been notably lower than the record high numbers in 2022. 

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 had only averaged around 2,141 per month. The November figure of 3,290 continues the steady uptick in DRO’s, probably being the option of choice to those who may previously have been badly advised into an IVA. 

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.

In November, there were 661 bankruptcies, against a 2022 average of 557 per month. We expect the bankruptcy numbers to steadily pick up, showing a more marked increase into 2024.

In November, 522 bankruptcy applications were instigated by indebted individuals – a slight increase from the 12-month average of 488.

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 November, there were 139 creditors’ petitions, which continues the slow rise on the preceding 12 months’ average of 134.

We expect to see creditor-driven bankruptcies begin to steadily increase further into 2024, 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 the process.

Northern Ireland

In November 2023 there were 111 individual insolvencies in Northern Ireland, 24% lower than in November 2022. This consisted of 70 IVAs, 21 DROs and 20 bankruptcies.