Q2 Scottish quarterly insolvency statistics (July to September 2018) have been released by the Accountant in Bankruptcy (AiB), Scotland's insolvency service.

Personal insolvencies

Awards of bankruptcy in Scotland have remained largely static, when compared to this period last year.

The 1,150 bankruptcy awards for the second quarter of 2018-19 are almost identical to the 1,146 awarded in the same quarter for 2017-18.

However, total personal insolvencies, which include both bankruptcies and protected trust deeds (PTDs), rose by 23 per cent from 2,493 in the second quarter of 2017-18 to 3,067, driven by an increase in PTDs. There were 3,067 PTDs in the second quarter of 2018-19, although this was down from the 3,218 recorded in the first quarter of the year.

Commenting on the latest figures, minister for business, fair work and skills, Jamie Hepburn, said: “The number of individuals entering insolvency continues to be significantly lower than 10 years ago, but we cannot take the issue of unsustainable personal debt lightly.

“Our absolute priority is to ensure that people struggling with debt receive the right advice and are offered the most appropriate solutions. That is why we will continue to consider whether the most financially vulnerable in society are made aware of the choices open to them, and if future legislative action is required."

Tim Cooper, Chair of R3 in Scotland, said:

“The recent real-terms growth in wages when measured against inflation has helped ease the pressure on many people’s budgets, but the growth in wages has hardly been spectacular, and people’s incomes have not fully recovered since the global financial crisis of ten years ago. The considerable rise in the cost of living over the last decade means that strains on personal finances are still common. There are, however, signs that the unemployment rate has bottomed out, which may cause further rises in pay, and which could reduce some of the underlying upwards pressure on insolvency numbers."

Corporate insolvencies

The number of Scottish corporate insolvencies rose very slightly during the quarter from the same period a year ago. There were 232 total corporate insolvencies during the quarter, up from the 224 recorded in the second quarter of 2017-18. This number was composed of 128 compulsory liquidations and 104 creditors’ voluntary liquidations. There were no receiverships recorded during the quarter. 

Nevertheless, the 232 recorded during the second quarter of 2018-19 is down on the 245 reported in the first quarter of the year.

On corporate insolvencies, Tim Cooper said:

“The quarter-on-quarter fall in the number of corporate insolvencies is the second decrease in a row in the quarterly figures, but it is still too soon to say whether this fall will be sustained in coming months. There were still, however, more corporate insolvencies than in the same quarter last year, which underlines that many parts of the Scottish business community are experiencing difficult trading conditions."

Read more about the Q2 figures here, and read further R3 commentary here.