Insolvency statistics released for May 2021
Company and individual insolvencies remain low
The latest monthly release of insolvency statistics for England and Wales was published on the 15 June 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 May 2021 there was a total of 1011 registered company insolvencies which is higher than last month (925). The insolvencies comprised 930 CVLs, 31 compulsory liquidations, 43 administrations and 6 CVAs. There was 1 receivership appointment.
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 – May 2021*
- There were 31 compulsory liquidations, which is 6% lower than May 2020 and 89% lower than May 2019;
- 930 were CVLs, which is 18% higher than May 2020 but 3% lower than May 2019;
- Six were CVAs, which is 50% lower than May 2020 and 81% lower than May 2019;
- There were 43 Administrations, which is 61% lower than May 2020 and 55% lower than May 2019; and
- There was one receivership appointment.
New procedures introduced by CIGA 2020
Between 26 June 2020 and 31 May 2021, four companies obtained a moratorium and nine companies had a restructuring plan registered at Companies House. 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 1,525 DROs and 718 bankruptcies in May 2021 in England & Wales.
The number of DROs in May 2021 was similar to in May 2020 and 33% lower than in May 2019.
The bankruptcies were made up of 647 debtor applications and 71 creditor petitions.
Bankruptcies were 3% lower than in May 2020 driven by a drop in debtor applications (6% lower), but creditor petitions were 39% higher. It should be noted that creditor petitions were particularly low in May 2020 as this was during the first UK lockdown. Compared to May 2019, total bankruptcies were 50% lower; debtor applications were 44% lower and creditor petitions were 76% lower.
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, 7,393 IVAs registered per month in the three-month period ending May 2021, 6% lower than for the three-month period ending May 2020 and 4% higher than the three-months ending May 2019.
Note that the IVA series is historically volatile as it is based on date of registration at the Insolvency Service (see the Data Sources and Methodology section for more information).
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 May 2021 published 15 June 2021 – see the full report here: https://www.gov.uk/government/statistics/monthly-insolvency-statistics-may-2021/commentary-monthly-insolvency-statistics-may-2021
Image source: The Insolvency Service Monthly insolvency statistics, May 2021