Monthly insolvency statistics – October 2021

Corporate insolvencies

England and Wales

Total corporate insolvencies (1,405) were 63% higher than in the same month in 2020 (864) and 5% lower than in October 2019, pre pandemic (1,480). As with the last two months, totals insolvencies have been driven by a significant number of companies (1,248) entering Creditors’ Voluntary Liquidations (“CVLs”) – a director led insolvency – albeit, CVLs are 6% lower than they were in September 2021. For the fifth consecutive month, CVL levels are as high, if not higher, than pre-pandemic levels in 2019.

Administrations increased by 17% from September (81) to October (95) but still remain 40% lower when compared to October 2019 (159).  The Government’s tapering measures in respect of creditor enforcement action by way of statutory demands and winding-up petitions continues to suppress the number of Compulsory Liquidations (“WUCs”) but we still saw a 64% increase in this type of insolvency from 28 in September to 46 in October. We understand that there is still a significant delay in the Court system and so we fully expect WUCs to significantly increase over the next 6 months, especially once the tapering measures are removed in March 2022. 

Scotland

In October 2021 there were 68 company insolvencies registered in Scotland, 58% higher than in October 2020 but 18% lower than in October 2019. This was comprised of 12 compulsory liquidations, 54 CVLs and 2 administrations. There were no CVAs or receivership appointments. Historically, the volume of company insolvencies registered in Scotland has been driven by compulsory liquidations. However, since April 2020, there have been more than twice as many CVLs as compulsory liquidations.

Northern Ireland

In October there were 14 company insolvencies registered in Northern Ireland, 75% higher than in October 2020 but 73% lower than October 2019. This is comprised of one administration, one compulsory liquidation and 12 CVLs. There were no CVAs or receivership appointments.

Personal Insolvencies

England and Wales

The personal insolvency statistics for October 2021 reveal that there were only 601 bankruptcy orders made in the month, a new historical low, 44% lower than October 2020 and 57% lower than October 2019.

There was a very slight increase in creditor’s petitions but a more significant drop in those bankruptcy applications made by the debtor.

The 1,937 Debt Relief Orders (DROs) in October 2021 were 23% higher than October 2020 but remained lower than pre-pandemic levels. In 2021, there were an average of around 1,400 DROs per month before the criteria were widened, and an average of 1,770 per month after the changes. As we have stated previously, this increase is largely a result of those “bankruptcies” which have now become eligible to be a DRO.

The monthly trend of around 7,000 Individual Voluntary Arrangements (IVAs) being registered continued (7,031). This month’s IVAs are 14% higher than October 2020 and 4% higher than October 2019 but the overall trend remains flat.

Breathing Space

Since the launch of the Breathing Space (BS) legislation, there have been 32,082 registrations, with 31,651 Standard BS and 431 Mental Health BS registrations.

October saw the lowest number of BS registrations since the launch, with only 4,755 Standard BS schemes entered.

The low numbers across the board can be attributed to a whole range of factors and variables, but the main drivers will be the continued support from the state, forbearance from creditors, many of who will have introduced their own in-house versions of BS, and the general lack of pressure on the indebted to take the next positive step into one of these formal procedures.

Although the general mood is that the above scenario is unsustainable, it is likely that the fallout will be slow and the numbers will likely creep up month on month, rather than demonstrating any significant increases over a short period.

In the summer, many were predicting the turn of the year as the point at which personal insolvency numbers would noticeably increase, but a safer bet might well be the late spring and summer of 2022.

Northern Ireland

In October 2021 there were 102 individual insolvencies in Northern Ireland, 11% lower than October 2020 and 56% lower than October 2019. This consisted of 95 IVAs, 4 DROs and 3 bankruptcies.