The Insolvency Service has published its latest figures which indicated that in September personal insolvencies in England and Wales increased to 7,450 in September 2020 compared to August’s figure of 6,372, but remained well below September 2019’s figure of 12,256
There were, on average, 4,639 IVAs registered in each of the 3 months ending September 2020. This was 38% lower than the rolling 3-month average observed in the same period ending September 2019.
There were 1,527 DROs and 1,036 bankruptcies (the latter was made up of 963 debtor applications and 73 creditor petitions). There was a 37% reduction in DROs and a 24% reduction in bankruptcies in September 2020, compared with the same month last year. The reduction in bankruptcies was driven by a 14% fall in debtor applications and a 71% reduction in creditor petitions.
Overall numbers of individual insolvencies remained low in September 2020, when compared with the same month in the previous year. This was likely to be at least partly driven by government measures put in place in response to the coronavirus (COVID 19) pandemic
Commenting on the figures, Colin Haig, President of insolvency and restructuring trade body R3 and Head of Restructuring at Azets said “These results show that the toll the COVID-19 pandemic is taking on businesses and consumers may be starting to be felt in the official insolvency numbers, but the Government’s support measures have reduced the size and scale of the initial impact.”
“On the personal insolvency side, numbers increased across the board with more individuals using Debt Relief Orders (DROs), bankruptcies and Individual Voluntary Arrangements (IVAs) in September than in August.”
“The situation for businesses and consumers remains worrying. The economy is still 9% below pre-pandemic levels, despite growth of 2.1% in August, which shows it has failed to fully recover from the significant contraction in April.”
“Consumer confidence is low as people are worried about their finances and the health of the economy. Although consumer borrowing has increased, the prospect of increased COVID restrictions, uncertainty around employment, and winter approaching all make it more likely people will cut back on spending as they save for the future.”