Insolvency statistics released for April 2022

High insolvency rates are driven by the increasing number of CVLs

The number of registered company insolvencies in April 2022 was 1,991:

  • More than double the number registered in the same month in the previous year (925 in April 2021), and
  • 39% higher than the number registered three years previously (pre-pandemic; 1,429 in April 2019).

For individuals, 530 bankruptcies were registered, which was 36% lower than in April 2021 and 64% lower than April 2019.

Due to a temporary data reporting system issue, data from one working day of April 2022 is missing and numbers are therefore likely to be revised upwards in next month’s release. This includes data for all individual insolvencies in England and Wales, as well as compulsory liquidations in England and Wales.

Corporate Insolvencies

Of the 1991 registered company insolvencies in April 2022:

  • There were 1,777 CVLs, which is 118% (2.2 times) higher than in April 2021 and 74% higher than in April 2019;
  • 91 were compulsory liquidations, which is 203% (3 times) higher than April 2021, but 61% lower than April 2019;
  • 10 were CVAs, which is double the amount in April 2021 but 62% lower than April 2019;
  • There were 113 administrations, which is 51% higher than April 2021 but 22% lower than April 2019; and
  • There were no receivership appointments.

Between 26 June 2020 and 30 April 2022, in England & Wales, 38 moratoriums were obtained and 12 companies had a restructuring plan registered at Companies House. These two new procedures were created by the Corporate Insolvency and Governance Act 2020.

Impact of COVID-19 business support measures

Lower numbers of compulsory liquidations is likely to be partly driven by government measures put in place to support businesses and individuals during the pandemic, including:

  • Temporary restrictions on the use of statutory demands and certain winding-up petitions (leading to company compulsory liquidations).
  • Enhanced government financial support for companies and individuals.

As the Insolvency Service does not record whether an insolvency is directly related to the coronavirus pandemic, it is not possible to state the direct effect of the pandemic on insolvency volumes.

Debt relief orders and bankruptcies

There were 1,708 DROs and 530 bankruptcies in April 2022 in England & Wales.

The number of DROs in April 2022 was 20% higher than in April 2021, but 29% lower than in April 2019. Changes to DRO eligibility came into effect on 29 June 2021, including an increase in the level of debt at which people can apply for a DRO from £20,000 to £30,000 (as indicated on Figure 3). The increase in the number of DROs registered since June 2021 is likely to have been caused by this expansion of the eligibility criteria.

The bankruptcies were made up of 443 debtor applications and 87 creditor petitions. Monthly bankruptcy numbers between July 2021 and April 2022 were lower than the numbers in 2020, which were already lower than pre-pandemic levels.

Bankruptcies were 36% lower than in April 2021. Debtor applications were 40% lower but creditor petitions were at a similar level to April 2021.

Compared to April 2019, total bankruptcies were 64% lower; debtor applications were 63% lower and creditor petitions were 71% lower.

Individual voluntary arrangements

There were, on average, 7,516 IVAs registered per month in the three-month period ending April 2022, 10% higher than for the three-month period ending April 2021 and 22% higher than the three-months ending April 2019.

Breathing Space Registrations

Between 4 May 2021 (when the scheme was launched) and 30 April 2022 there were 63,856 breathing space registrations. These composed of 62,843 standard breathing space registrations and 1,013 mental health breathing space registrations (for those receiving mental health crisis treatment).

In April 2022 there were 5,388 breathing space registrations. This was made up of 5,282 (98%) standard breathing space registrations and 106 (2%) mental health breathing space registrations.

Advice

We publish a summary of the reports here each month. For advice relating to support, insolvency or recovery options, please contact us.

* This content and data was reported in full in the Insolvency Service Statistics for April  2022 published  17 May 2022 – see the full report here:

Monthly Insolvency Statistics, April  2022 – GOV.UK (www.gov.uk)

Image source: The Insolvency Service Monthly insolvency statistics, April 2022