In response to the coronavirus (COVID-19) pandemic, the individual and company October 2020 insolvency statistics for England and Wales have been published by the Insolvency Service, together with related insolvency figures for Scotland and Northern Ireland.

Insolvency statistics for England and Wales following coronavirus lockdown

The Insolvency Service is releasing monthly company and individual insolvency statistics for England and Wales and Northern Ireland, as well as monthly company statistics for Scotland, throughout the remainder of the coronavirus (COVID-19) pandemic, and for a period thereafter.

However, these statistics are marked ‘experimental’ since the process of compiling insolvency data in monthly format is new to the statistics team at the Insolvency Service and is subject to review. The Insolvency Service also notes that as they do not record whether an insolvency is directly related to the coronavirus pandemic, as it is not possible to state its direct effect on insolvency volumes.

Company insolvency statistics for England and Wales – October 2020

Total company insolvencies decreased in October 2020 when compared to October 2019. In October 2020, there were a total of 856 company insolvencies in England and Wales, which included:

• 672 creditors’ voluntary liquidations (CVLs)
• 59 compulsory liquidations
• 104 administrations
• 21 company voluntary arrangements (CVAs)
• 0 receiverships

The overall number of company insolvencies decreased by 42 per cent in October 2020, when compared to the same month last year. This was primarily driven by a decrease in the numbers of CVLs and compulsory liquidations which fell by 36 per cent and 76 per cent respectively. There was also a 35 per cent decrease in the numbers of administrations and a 42 per cent decrease in the number of CVAs when compared to the same month last year.

According to The Insolvency Service, the overall reduction in company insolvencies was likely to be, in part, driven by the range of government measures put in place to financially support companies in response to the coronavirus pandemic, including the Corporate Insolvency and Governance Act.

Individual insolvency statistics for England and Wales – October 2020

As individual voluntary arrangement (IVA) numbers have been calculated using different methodology, they are presented separately to debt relief orders (DROs) and bankruptcies.

Overall DROs and bankruptcies decreased in October 2020 when compared to the same month last year, while IVAs were also lower than the rolling three-month average observed in the period ending October 2019. In October 2020, there were:

• 6,154 IVAs registered (using a three-month rolling average)
• 1,572 DROs
• 1,048 bankruptcies (970 debtor bankruptcies and 78 creditor bankruptcies)

Debt relief orders and bankruptcies

There was a 37 per cent reduction in DROs registered when compared to October 2019, while bankruptcies also fell by 25 per cent when compared to the same month as last year. The reduction in bankruptcies was driven by a 17 per cent fall in debtor bankruptcies and a 67 per cent reduction in creditor bankruptcies.

The fall in DROs and debtor bankruptcies corresponds with a reduction in applications for these services, which coincided with the announcement of enhanced government financial support for individuals and businesses since the emergence of the coronavirus pandemic. The fall in creditor bankruptcies will likely have been a result of reduced HMRC enforcement activity during this period and in part, a result of reduced operational running of the courts during this time.

Individual voluntary arrangements

Due to volatile data, the Insolvency Service provided three-month rolling averages for IVAs, which indicate what the overall trend of IVA registrations might look like. Using the three-month rolling average, IVAs in October 2020 were 9 per cent lower when compared to the average number of registered IVAs during each of the three months ending October 2019.

It is noted that the three-month rolling averages should be used to consider potential changes in IVA trends over time, and both sets of numbers should be used with caution.

Company insolvency statistics for Scotland – October 2020

The Accountant in Bankruptcy, Scotland’s Insolvency Service, administers company insolvency in Scotland. They reported that in October 2020 company insolvencies in Scotland decreased when compared to October 2019.

There were 44 company insolvencies in total, a decrease of 47 per cent when compared to October 2019. Of the 44 total insolvencies in Scotland in October 2020, there were:

• 11 compulsory liquidations
• 27 CVLs
• 5 administrations
• 1 receivership
• 0 CVAs

Company and individual insolvency statistics for Northern Ireland – October 2020

In Northern Ireland in October 2020 there were:

• 8 company insolvencies
• 114 individual insolvencies

Companies insolvencies fell by 84 per cent when compared to October 2019 and consisted of 5 CVLs, 1 administration and 2 CVAs. There were no compulsory liquidations or administrative receiverships.

Individual insolvencies were down 51 per cent from October 2019 and consisted of 77 IVAs, 18 DROs and 19 bankruptcies.

Next insolvency statistics release

Individual and company insolvency statistics for November 2020 will be released on 15 December 2020 at 9.30am.

See also

Monthly insolvency statistics for England and Wales – September 2020

What you need to know about Corporate Insolvency and Governance Bill

How insolvency affects companies in the construction sector

Find out more

Monthly Insolvency Statistics October 2020 (GOV.UK)

The Insolvency Service (GOV.UK)

Accountant in Bankruptcy (AiB)

Corporate Insolvency and Governance Act 2020 (Legislation)

Image: Getty Images

Publication date: 13 November 2020