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Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

06 MAY 2011

Latest Insolvency Statistics - First Quarter 2011

The Insolvency Service (IS) have published the insolvency statistics for the first quarter of 2011. As the IS note "there were 4,121 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the first quarter of 2011.  This was an increase of 3.7% on the previous quarter and an increase of 2.1% on the same period a year ago. This was made up of 1,074 compulsory liquidations (which are down 10.2% on the previous quarter and down 17.2% on the corresponding quarter of the previous year), and 3,047 creditors’ voluntary liquidations (which are up 9.7% on the previous quarter and up 11.2% on the corresponding quarter of the previous year). Additionally, there were 1,314 other corporate insolvencies in the first quarter of 2011 comprising 349 receiverships, 782 administrations and 183 company voluntary arrangements. In total these represented a decrease of 2.2% on the same period a year ago."


On the personal side the IS note that "There were 30,162 individual insolvencies in England and Wales in the first quarter of 2011. This was a decrease of 15.5% on the same period a year ago. This was made up of 12,539 bankruptcies (which were down 31.3% on the corresponding quarter of the previous year), 10,835 Individual Voluntary Arrangements (IVAs), (which were down 8.0% on the corresponding quarter of the previous year) and 6,788 Debt Relief Orders (DROs), (which were up 20.3% on the corresponding quarter of the previous year). In the first quarter of 2011, 84.2% of bankruptcies were made on the petition of the debtor, broadly comparable to the levels for recent quarters.  The percentage of bankruptcy orders involving trading debts (self-employed bankruptcies) was 18.9% in the fourth quarter of 2010 (first quarter 2011 figures for trading-related bankruptcies are not yet available), notably higher than levels seen in recent quarters."

On statistics in the the long term the IS have noted, "In the twelve months ending Q1 2011, approximately 1 in 139 active companies (or 0.7% of all active registered companies) went into liquidation, which is comparable to the previous quarter, when this figure stood at 1 in 138.  As Figure 3 shows, the liquidation rate remains low compared to a peak of 2.6% in 1993, and the average of 1.3% seen over the last 25 years.  It should be noted that the number of active companies has changed considerably over this period; there were 2.3 million active registered companies in Q1 2011; this compares with only about 900,000 in the early 1990s and less than 800,000 in 1986.

In the twelve months ending Q1 2011, approximately 1 in 337 people became insolvent.  This is down from 1 in 323 in the previous quarter.  As Figure 3 shows, the individual insolvency rate has displayed a steeply upward path (with some fluctuations) since 2004 and is currently elevated compared to the annual average of 1 in 1800 (0.1%) people seen over the last 25 years."

A number of commentators (e.g. Yorkshire Post, Sky News) have discussed the figures. The BBC have focused on the fact that personal insolvency figures have fallen overall. The new president of R3, Ms Frances Coulson has provided the Beeb with a quote. She noted:

"Our research shows that, against the backdrop of increased living costs and falling income, four in five consumers have changed how they shop in a bid to save money. A further drop in personal insolvency may signal that the reining in of domestic belts is starting to pay off," he said.

"However, this data only captures those that are in formal insolvency procedures so we are unable to gauge how many households are struggling."

 

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