Insolvency Service figures published last month for England & Wales showed a 10% reduction in companies entering into formal insolvency in 2015 compared with 2014 and the lowest annual total since 1989. Furthermore, personal insolvencies fell by 19% last year, compared to 2014, and the lowest annual total since 2005.
 
image001

 
Of particular note is the decrease in compulsory liquidations (winding up orders made by a court), which fell to the lowest annual total since 1981 and the fall in Individual Voluntary Arrangements (IVAs) which were at the lowest level since 2008. Other types of company insolvency also continued to fall, with Administrations in 2015 being 11% lower than in 2014, and at the lowest level since 2003 (when changes to administration resulting from the Enterprise Act 2002 took effect).
 
company-insolvencies

 

Phillip Sykes, president of R3, the insolvency regulatory body, commented that “continuing low inflation and a growing economy have helped people pay down or service debts. The return of real wage growth has put a big dent in insolvency numbers.” Personal finances appear to be in a better shape than they have been since the recession and R3’s regular survey of 2,000 British adults has found that the proportion of British adults who say they often or sometimes struggle to payday is at a record low of 36%.

However, Matthew Chadwick, head of personal insolvency at BDO, warned that “pressures on disposable incomes appear to be driving up debt levels with relatively low interest rates and sustained credit lending perhaps papering over financial cracks that may become more apparent in the future”. This is demonstrated by statistics showing that household debt as a percentage of net household income, is now 55% being the highest level in four years while real earnings have grown by just 0.7% between January and November 2015.

The falling price of oil may be partly responsible the fall in corporate and personal insolvencies but this will be causing difficulties for the oil and gas sector, with many businesses going through a period of restructuring and cost-cutting which could lead to more insolvencies in that area. Mr. Sykes further warned that this trend will not last forever as “increasing volatility in the stock markets, driven by concern over China, lower growth in the developing world and geopolitical risk in the Middle East all contribute to a time of uncertainty and lower confidence amongst corporates which may impact growth in the foreseeable future.” Therefore, there may be changes ahead.

If you are experiencing financial difficulties then please contact Francis Clark’s Insolvency and Business Recovery Department which is experienced in assessing and providing solutions for all types of business and personal insolvency, including acting in formal insolvency appointments when appropriate.

Year

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Total new
company
insolvencies

17,819

15,866

21,072

24,011

19,796

20,286

19,350

17,681

16,316

14.629

Compulsary
liquidations

5,418

5,165

5,494

5,643

4,792

5,003

4,261

3,632

3,755

2,874

New creditors
voluntary
liquidations

7,719

7,625

9,995

13,509

11,507

11,948

11,907

11,453

10,700

9,981

Administations

3,560

2,531

4,808

4,019

2,682

2,539

2,334

2,009

1,587

1,406

Company
voluntary
arrangements

534

417

586

723

766

748

816

570

552

357

Receivership
appointments

588

128

189

117

49

48

32

17

22

11

Year

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Total new
company
insolvencies

17,819

15,866

21,072

24,011

19,796

20,286

19,350

17,681

16,316

14.629

Compulsary
liquidations

5,418

5,165

5,494

5,643

4,792

5,003

4,261

3,632

3,755

2,874

New creditors
voluntary
liquidations

7,719

7,625

9,995

13,509

11,507

11,948

11,907

11,453

10,700

9,981

Administations

3,560

2,531

4,808

4,019

2,682

2,539

2,334

2,009

1,587

1,406

Company
voluntary
arrangements

534

417

586

723

766

748

816

570

552

357

Receivership
appointments

588

128

189

117

49

48

32

17

22

11

Year

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Total new
company
insolvencies

17,819

15,866

21,072

24,011

19,796

20,286

19,350

17,681

16,316

14.629

Compulsary
liquidations

5,418

5,165

5,494

5,643

4,792

5,003

4,261

3,632

3,755

2,874

Year

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

New creditors
voluntary
liquidations

7,719

7,625

9,995

13,509

11,507

11,948

11,907

11,453

10,700

9,981

Administations

3,560

2,531

4,808

4,019

2,682

2,539

2,334

2,009

1,587

1,406

Year

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Company
voluntary
arrangements

534

417

586

723

766

748

816

570

552

357

Receivership
appointments

588

128

189

117

49

48

32

17

22

11

0800 832 1875 - Rescue | Recovery | Insolvency