The Insolvency Service have brought us a cheery Valentine’s Day message by releasing their monthly insolvency statistics for January 2023 today (14 February).
Main Messages
The number of registered company insolvencies in January 2023 was 1,671:
- 7% higher than in the same month in the previous year (1,567 in January 2022), and
- 11% higher than the number registered three years previously (pre-pandemic; 1,502 in January 2020).
There were 189 Compulsory Liquidations in January 2023, which is 52% more than in January 2022, but 36% lower than in January 2020. Numbers of Compulsory Liquidations have increased from historical lows seen during the coronavirus (COVID-19) pandemic, partly as a result of an increase in winding-up petitions presented by HMRC.
The numbers provided in this publication are not seasonally adjusted and changes between consecutive months may not indicate overall trends. Therefore, in this publication we compare to the same calendar month in previous year(s). Seasonally adjusted figures that more accurately measure trends over time are available in the quarterly insolvency statistics.
In January 2023 there were 1,382 Creditors’ Voluntary Liquidations (CVLs), 2% higher than in January 2022 and 37% higher than January 2020. Numbers of Administrations and Company Voluntary Arrangements (CVAs) remained lower than before the pandemic but were higher than in January 2022.
For individuals, 612 Bankruptcies were registered, which was 5% higher than in January 2022, but 60% lower than January 2020.
There were 1,741 Debt Relief Orders (DROs) in January 2023, which was 7% lower than January 2022 and 21% lower than the pre-pandemic comparison month (January 2020).
There were, on average, 6,328 Individual Voluntary Arrangements (IVAs) registered per month in the three-month period ending January 2023, which is 1% higher than the three-month period ending January 2022, and 6% higher than the three-month period ending January 2020.
Some IVAs registered on 30th and 31st January had not been input into the Insolvency Service administration systems at the time of data extraction for this publication. The number of registered IVAs for January 2023 is therefore likely to be an undercount. Any IVAs not yet counted will be included in next month’s publication.
Note that the IVA series is historically volatile as it is based on date of registration at the Insolvency Service (see the Methodology and data quality section for more information).
Due to a data issue currently under investigation, the number of Breathing Spaces in January is not available at the time of writing.
In 2022, there were 70,546 registered breathing spaces, comprised of 69,334 Standard and 1,212 Mental Health breathing space registrations. Average monthly numbers were 14% higher in 2022 than in 2021.
From the start of the coronavirus (COVID-19) pandemic until mid-2021, overall numbers of company and individual insolvencies were low when compared with pre-pandemic levels. This is likely to have been partly driven by government measures put in place to support businesses and individuals during this time. Company insolvency numbers have now returned to and exceeded pre-pandemic levels, but for individuals, numbers of bankruptcies and debt relief orders remain lower.
Company Insolvencies
The number of company insolvencies was 11% higher than in January 2020 and 7% higher than the number in January 2022.
The increase in company insolvencies compared to January 2022 was driven by an increase in the number of Compulsory Liquidations and CVLs. The increase in Compulsory Liquidations is partly as a result of an increase in winding-up petitions presented by HMRC.
Of the 1,671 registered company insolvencies in January 2023:
- There were 1,382 CVLs, which is 2% higher than in January 2022 and 37% higher than in January 2020
- 189 were Compulsory Liquidations, which is 52% higher than January 2022, but 36% lower than January 2020
- 14 were CVAs, which is 8% higher than January 2022, but 56% lower than January 2020
- There were 86 Administrations, which is 21% higher than January 2022, but 49% lower than January 2020
- There were no Receivership appointments.
Between 26 June 2020 and 31 January 2023, in England & Wales, 42 moratoriums were obtained and 12 companies had a Restructuring Plan registered at Companies House. These two procedures were created by the Corporate Insolvency and Governance Act 2020.
Individual insolvencies
Bankruptcies and Debt Relief Orders
There were 1,741 DROs and 612 bankruptcies in January 2023 in England & Wales.
The Bankruptcies were made up of 518 debtor applications and 94 creditor petitions. Monthly Bankruptcy numbers over the past 18 months were lower than the numbers in 2020, which were already lower than pre-pandemic levels.
Bankruptcies were 5% higher than in January 2022. Debtor applications were 2% higher and creditor petitions were 21% higher than January 2022.
Compared to January 2020, total Bankruptcies were 60% lower; debtor applications were 60% lower and creditor petitions were 61% lower.
The number of DROs in January 2023 was 21% lower than in January 2020 and 7% lower than January 2022. DRO numbers increased following an eligibility change in June 2021 and for the past year have been slightly lower than pre-pandemic levels.
IVAs
Three-month rolling averages are presented to smooth the data and indicate what the overall trend of IVA registrations might look like if the underlying data were less volatile.
Whilst three-month rolling averages are used to consider potential changes in IVA trends over time, both sets of numbers should be used with caution.
Some IVAs registered on 30th and 31st January had not been input into the Insolvency Service administration systems at the time of data extraction for this publication. The number of registered IVAs for January 2023 is therefore likely to be an undercount. Any IVAs not yet counted will be included in next month’s publication.
There were, on average, 6,328 IVAs registered per month in the three-month period ending January 2023, 1% higher than for the three-month period ending January 2022 and 6% higher than the three months ending January 2020.
Company Insolvencies in Scotland
Legislation relating to company insolvency in Scotland is partly devolved. AiB, Scotland’s Insolvency Service, administers the Register of Insolvencies, which is a publicly accessible statutory register regarding the insolvency of individuals and businesses in Scotland, and includes company liquidations and receiverships.
This statistical release presents the numbers of Compulsory Liquidations, CVLs, Administrations, CVAs and Receivership appointments based on their registration date at Companies House, and numbers therefore reflect company insolvency registrations rather than insolvency procedure start dates.
In January 2023 there were 109 company insolvencies registered in Scotland, 114% (2.1 times) higher than the number in January 2022 and 51% higher than in January 2020. This was comprised of 53 Compulsory Liquidations, 54 CVLs and two Administrations. There were no Receivership appointments or CVAs.
Historically, the volume of company insolvencies registered in Scotland has been driven by Compulsory Liquidations. However, since April 2020, there have been nearly three times as many CVLs as Compulsory Liquidations.
Between 26 June 2020 and 31 January 2023, in Scotland, no Moratoriums were obtained and two companies had a Restructuring Plan registered at Companies House. These two procedures were created by the Corporate Insolvency and Governance Act 2020.
