Insolvency statistics released for February 2021
Latest company and individual insolvency statistics are the lowest since January 2019
The latest monthly release of insolvency statistics for England and Wales was published on 16th March 2021. *
Overall numbers of company and individual insolvencies have remained low since the start of the
first UK lockdown in March 2020, when compared with the same time period last year. This month does in fact show the lowest number of insolvencies since January 2019.
Impact of COVID-19 business support measures
The overall low numbers are likely to be at least partly driven by Government measures set up in response to the coronavirus (COVID 19) pandemic, including:
- Reduced court and tribunal operations and reduced HMRC enforcement activity since the UK lockdown was applied
- Temporary restrictions on the use of statutory demands and certain winding-up petitions (leading to company compulsory liquidations) from 27 April and extended further to 31 March 2021 under the extensions to the Corporate Insolvency and Governance Act.
- 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 its direct effect on insolvency volumes.
The statistics in detail – February 2021*
In February 2021 there was a total of 686 company insolvencies in England and Wales, comprised of:
- 591 CVLs
- 33 compulsory liquidations
- 56 administrations
- 6 company voluntary arrangements (CVAs)
There were no receivership appointments.
In February 2021, when compared with the number of company insolvencies registered in February 2020:
- Compulsory liquidations were 86% lower;
- CVLs were 38% lower;
- There were 68% fewer CVAs; and
- Administrations were 62% lower.
So far, December 2020 was the only month since the start of the first UK lockdown in which overall registered company insolvencies were higher than in the same month of the previous year. The February results show that these results are not an ongoing trend.
New procedures introduced by CIGA 2020
Between 26 June 2020 and 28 February 2021, four companies obtained a moratorium and five companies had a restructuring plan sanctioned by the court. These two new procedures were created by the Corporate Insolvency and Governance Act 2020. The low number of cases of each of these new legislative tools since the Act came into force is likely to be as a result of the range of Government support provided to companies as mentioned above, including the range of temporary measures that apply until 30 June 2021
Debt relief orders and bankruptcies
There were 1,389 DROs and 898 bankruptcies in February 2021 in England & Wales. The bankruptcies were made up of 813 debtor applications and 85 creditor petitions. The numbers of DROs and bankruptcies in February 2021 were both 42% lower than in February 2020. Debtor applications were 40% lower and creditor petitions were 59% lower.
How the numbers may be affected
The fall in DROs and debtor bankruptcies corresponds with a reduction in applications which coincided with the announcement of enhanced Government financial support for individuals and businesses.
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.
Individual voluntary arrangements
There were, on average, 6,138 IVAs registered per month in the three-month period ending February 2021, 11% higher than for the three-month period ending February 2020. It should be noted that one IVA provider experienced technical issues between December 2019 and March 2020 which resulted in IVAs not being registered with the Insolvency Service on a timely basis. This meant the number of IVAs registered in the three-months ending February 2020 was artificially low.
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 February 2021 published 16 March 2021 – see the full report here: https://www.gov.uk/government/statistics/monthly-insolvency-statistics-february-2021
Image source: The Insolvency Service Monthly insolvency statistics, February 2021