Personal insolvencies show minor increase

20th September 2021

Personal insolvencies in England & Wales  increased by 0.2% to 9,106 in August 2021 compared to July’s figure of 9,090, and were 42.7 % higher than August 2020’s figure of 6,381 according latest Insolvency Services figures.

There were, 614 bankruptcies were registered, which was 22% lower than August 2020 and 54% lower than August 2019.

There were 1,714 DROs registered, which was 29% higher than August 2020 but remained lower than pre-pandemic levels (12% lower than in August 2019). Changes were made to the eligibility criteria on 29th June, including an increase in the level of debt at which people can apply for a DRO from £20,000 to £30,000.

There were, on average, 7,021 IVAs registered per month in the three-month period ending August 2021, which is 44% higher than the three-month period ending August 2020 and 4% higher than the three-month period ending August 2019. Note that the IVA series is historically volatile as it is based on date of registration at the Insolvency Service.

Between the launch of the Breathing Space scheme on 4th May 2021, and 31st August 2021, there were 22,151 registrations, comprised of 21,884 Standard breathing space registrations and 267 Mental Health breathing space registrations.

Colin Haig, President of insolvency and restructuring trade body R3 and Head of Restructuring at Azets, said “The personal insolvency side, figures show a small increase in the total number of personal insolvencies compared to the previous month, it’s too early to tell whether this is a definite trend.

“However, personal insolvencies have risen sharply compared to this time last year. This has been driven by an increase in the number of Individual Voluntary Arrangements, which could be more of an indication that people are seeking and receiving help with their financial issues, rather than necessarily showing that personal insolvency levels are rising.

“It has been a tough 18 months for the nation’s personal finances, but the situation appears to be improving. Unemployment is down and job vacancy numbers are at their highest for 20 years, but there is likely to be some concern among consumers around their job stability as furlough ends and the prospect of future lockdowns is mooted as we reach the winter months.

“The best thing anyone who is worried about their personal or business finances can do is seek advice as soon as they become concerned. Doing so typically gives you more options, more time to make a decision about your next step and a better outcome than if you’d waited and let the problem spiral.”