Insolvency statistics for April to June 2016 in England and Wales were released by the Insolvency Service on 5 September 2016.
The main messages are:
COMPANIES
- Total company insolvencies were lower than the previous quarter and also decreased on the year.
- This decrease was mainly driven by a decrease in compulsory liquidations. Other types of insolvency remained fairly stable.
PEOPLE
- Total individual insolvencies increased for the fourth consecutive quarter, driven primarily by an increase in individual voluntary arrangements
- Debt relief orders also increased, because of a change to the eligibility criteria.
The effect of the change from court-based to online bankruptcy applications is not yet clear from the statistics.
Looking at the figures in more detail, an estimated 3,617 companies entered insolvency in the three months to the end of June 2016, which was 4.2% lower than in the previous quarter and 2.7% lower than the corresponding period last year. This was driven by a decrease in compulsory liquidations.
A total of 662 companies were subject to a compulsory winding-up order in the quarter, an 18.6% decrease on the previous quarter and 14.0% lower than in the same quarter in 2015.
Creditors’ voluntary liquidations remained fairly stable. An estimated 2,501 companies entered creditors’ voluntary liquidation in the period, a 2.6% decrease on the previous quarter but 0.7% higher compared to the same period in 2015.
Other types of company insolvencies also remained in line with medium term trends. There were an estimated 340 administrations in the quarter, an increase of 8.2% compared to the previous quarter but 8.7% lower than the same quarter in 2015. There were an estimated 115 company voluntary arrangements in the same period.
The estimated liquidation rate in the 12 months ending June 2016 was 0.42% of active companies, the lowest level since comparable records began in 1984.
By way of contrast, total individual insolvencies increased for the fourth consecutive quarter.
The number of people who became insolvent in England and Wales was 22,503 in the three months to June 2016, a 6.9% increase on the previous quarter, and 22.4% higher than the same quarter in 2015.
This was driven by an increase in individual voluntary arrangements (IVAs). There were 12,225 IVAs in the period, which was 15.4% higher compared to the previous quarter and 42.7% higher compared to the same period in 2015
Debt relief orders (DROs) also increased. There were 6,741 DROs which was a 0.3% increase compared to the previous quarter and 15.6% higher than the same period in 2015. This increase was because of a change to eligibility criteria effec