Personal insolvencies increase by 2%

Personal insolvencies increased by 2% to 9,518 in December 2020 when compared to November’s figure of 9,328, and were 13.4% higher than December 2019’s figure of 8,391.

Further analysis of the data on personal insolvencies has revealed a 38% increase in England and Wales over the last three months compared to the same quarter in 2019.

There were 1,241 DROs and 807 bankruptcies in December 2020 that were made up of 743 debtor applications and 64 creditor petitions). The numbers of DROs and bankruptcies in December 2020 were 40% and 26% lower respectively than in December 2019. Debtor applications were 20% lower and creditor petitions were 60% lower.

There were, on average, 7,918 IVAs registered in each of the three months ending December 2020, 38% higher than the rolling three-month average observed in the same period ending December 2019.

Overall numbers of individual insolvencies have remained low since the start of the first UK lockdown in March 2020, when compared with the same time period last 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 “Personal insolvency numbers grew slightly between November and December, due to a rise in Individual Voluntary Arrangements, although numbers of bankruptcies and Debt Relief Orders were lower in December than in the previous month. The rise in personal insolvencies compared with the same month in 2019 was entirely down to IVAs, as numbers of bankruptcies and DROs fell by over a third in December 2020 compared to December 2019.”

“While consumer confidence has improved over the last three months, it’s still much lower than it was this time last year, understandably. Although a number of people in the UK have saved money and repaid debts during the pandemic, others who haven’t been able to are struggling. A lot of people are worried about their finances and their financial future, as well as the current and future health of the economy.”