UK company insolvency statistics - Q4 2020

The October to December 2020 (Q4) company insolvency stats for England and Wales have been published by The Insolvency Service, together with related figures for Scotland and Northern Ireland.

Company insolvency statistics for England and Wales – 2020

There were 12,557 underlying company insolvencies in 2020, a 27 per cent decrease on 2019. This decrease was a result of lower numbers of insolvencies across all main insolvency procedures. In 2020, there were a total of:

9,418 creditors’ voluntary liquidations (CVLs) – a 22% decrease from 2019
1,351 compulsory liquidations – a 55% decrease from 2019
1,526 administrations – a 16% decrease from 2019
259 company voluntary arrangements (CVAs) – a 26% decrease from 2019
3 receiverships – two more than in 2019

The overall reduction in company insolvencies since the start of lockdown last year is likely to be 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.

Company insolvency statistics for England and Wales – Q4 2020

In England and Wales in Q4 2020, there were a total of 3,071 company insolvencies, including:

2,501 CVLs
137 compulsory liquidations
345 administrations
80 CVAs
0 receivership

Total company insolvencies in Q4 2020 increased by 17 per cent from Q3 2020 but decreased by 27 per cent from the same quarter in the previous year. Except for CVAs, which increased by 4 per cent when compared to Q4 2019, there were decreases in all types of company insolvency.

Liquidation rate statistics for England and Wales – Q4 2020

In the 12 months ending Q4 2020:

1 in 342 companies were liquidated
the company liquidation rate was 29.2 per 10,000 active companies in England and Wales
the company liquidation rate was slightly down in both the 12 months ending Q4 2019 and the same quarter a year ago

Unlike the absolute number of liquidations over a period, the liquidation rate indicates the probability of a company entering liquidation in the previous four quarters. In general, periods of economic growth result in liquidation rates decreasing.

Industry sector insolvency findings for England and Wales – Q4 2020

In the 12 months ending Q4 2020:

the construction industry had the highest number of new underlying company insolvencies with 2,042
the construction industry group also saw the largest decrease in underlying insolvency volumes, a 37 per cent decrease, when compared with the 12 months ending Q4 2019

Elsewhere the accommodation and food services (1,701), and wholesale and retail trade; repair of vehicles industrial (1,673) grouping had the second and third highest number of new underlying company insolvencies in the 12 months ending Q4 2020.

Scotland company insolvency statistics – Q4 2020

The Accountant in Bankruptcy, Scotland’s Insolvency Service, administers company insolvency in Scotland. They reported that in Q4 2020, there were 146 company insolvencies, a decrease of 44 per cent when compared to Q4 2019. Of the total company insolvencies in Scotland, there were:

45 compulsory liquidations
77 CVLs
23 administrations
0 CVAs
1 receivership

Due to administrative differences, most company liquidations in Scotland are compulsory liquidations. This contrasts with England and Wales where creditors’ voluntary liquidations (CVLs) account for most company liquidations. Figures in Scotland are also not seasonally adjusted.

Northern Ireland company insolvency statistics – Q4 2020

In Northern Ireland in Q4 2020, there were 24 company insolvencies, a decrease of 79 per cent when compared with the same quarter of the previous year. Of the total company insolvencies in Northern Ireland, there were: