Insolvency statistics released for March 2021
Latest company and individual insolvency statistics are still comparably low
The latest monthly release of insolvency statistics for England and Wales was published on the 15 April 2021. *
Overall, the numbers of registered company insolvencies have remained low since the start of the first UK lockdown in March 2020, when compared with pre-pandemic levels..
In March 2021 there was a total of 992 registered company insolvencies, comprised of 883 CVLs, 25 compulsory liquidations, 74 administrations and 10 CVAs. There were no receivership appointments.
Although this is a significant rise from last month (681 company insolvencies),the overall number of registered company insolvencies in March 2021 was 20% lower than in the same month in the previous year and 37% lower than in March 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 30 June 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 – March 2021*
In March 2021 there was a total of 992 registered company insolvencies, comprised of:
- 883 CVLs
- 25 compulsory liquidations
- 74 administrations
- 10 company voluntary arrangements (CVAs)
There were no receivership appointments.
The overall number of registered company insolvencies in March 2021 was 20% lower than in the same month in the previous year and 37% lower than in March 2019.
- Compulsory liquidations were 86% lower than 2020 and 90% lower than 2019;
- CVLs were 3% lower than 2020 and 23% lower than 2019;
- CVAs were 44% lower than 2020 and 66% lower than 2019; and
- Administrations were 44% lower than 2020 and 58% lower than 2019.
New procedures introduced by CIGA 2020
Between 26 June 2020 and 31 March 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 1,591 DROs and 1,028 bankruptcies in March 2021 in England & Wales. The bankruptcies were made up of 937 debtor applications and 91 creditor petitions. The numbers of DROs and bankruptcies in March 2021 were both 31% lower than in March 2020 and 34% lower than in March 2019. Compared to 2020, debtor applications were 29% lower and creditor petitions were 48% lower. Compared to 2019, debtor applications were 27% lower and creditor petitions were 67% 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, 6,388 IVAs registered per month in the three-month period ending March 2021, 24% higher than for the three-month period ending March 2020 and 2% higher than the three-months ending March 2019. 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 March 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 March 2021 published 15 April 2021 – see the full report here: https://www.gov.uk/government/statistics/monthly-insolvency-statistics-march-2021
Image source: The Insolvency Service Monthly insolvency statistics, March 2021