The wind and rain are back, half-term is nearly upon us (not sure how) and the Cold War is about to begin (the back and forth turning up and down of the thermostat between the teenager at home in shorts and Dad moping around moaning about the cost-of-living and switching lights off). It is also the day The Insolvency Service release the latest monthly statistics and we in the NTI newsroom are here to bring you them.
The cost-of-living has been playing havoc with trying to spot trends in the individual insolvency statistics. For individuals, the total number of insolvencies in September 2023 was 7,271, 27% lower than in the same month in the previous year (10,024 in September 2022).
The individual insolvencies consisted of 671 bankruptcies, 2,913 debt relief orders (DROs) and 3,687 individual voluntary arrangements (IVAs). The number of registered IVAs in September 2023 was less than half the number in September 2022, with the majority of this discrepancy due to an unusually large number of late registrations of IVAs approved in August and September. For reference, the numbers of IVAs are reported based on date of registration at the Insolvency Service, rather than date of approval.
Nonetheless, the overall trend is that IVA numbers in 2023 to date have been lower than the record-high numbers in 2022. DRO and bankruptcy numbers were higher than last year, although the number of bankruptcies remained less than half of (the now usual yardstick) pre-2020 levels.
Bankruptcies were 22% higher than in September 2022 driven by both a rise in debtor applications (14% higher) and creditor petitions (an increase of 53%, despite the rise of the deposit in the periods). The levels of bankruptcy orders in the first nine months of 2023 were slightly higher than in the same period in 2022, but remained less than half of pre-pandemic levels. Of course, one must remember the rise in DRO limits (done specifically to ruin NTI’s N-Dubz mnemonic) since the pandemic which will have impacted on these numbers, but it would also suggest forbearance from creditors which may be starting to wane.
In September 2023 there were 7,691 breathing space registrations (over 98% of which were “standard” breathing space). This is 25% higher than the number in September 2022 and more than all of the formal individual insolvency solutions added together. This would therefore imply that some debtors are using the breathing space as a stand alone solution, or are they then not grabbing the bull by the horns and reverting to type as the ostrich burying their head in the sand.
Turning to the corporate statistics where the runes are much easier to interpret (spoiler alert – they are on the increase). The number of registered company insolvencies in September 2023 was 1,967, 17% higher than in the same month in the previous year (1,688 in September 2022). This was higher than levels seen while the Government support measures were in place in response to the coronavirus (COVID-19) pandemic and also higher than pre-pandemic numbers.
Leading the way as always was CVLs with 1,576 (80%) with 255 compulsory liquidations, and administration taking home the bronze medal with 125. All of those numbers were higher than in September 2022 but CVAs remained level at 11. You probably won’t be surprised to read there were no receivership appointments last month.
The Insolvency Service only release a running total for CIGA moratoriums and restricting plans with the counter currently showing 46 and 22 respectively. A quick glance at last months statistics confirms our suspicion that this is because the monthly statistic would be fairly pointless because the numbers remain unchanged.