Main Messages for England and Wales

Company Insolvencies

The number of registered company insolvencies in January 2024 was 1,769, 5% higher than in the same month in the previous year (1,685 in January 2023). This was higher than levels seen while the Government support measures were in place in response to the coronavirus (COVID-19) pandemic and also higher than pre-pandemic numbers.

The company insolvencies consisted of 339 compulsory liquidations, 1,294 creditors’ voluntary liquidations (CVLs), 120 administrations and 16 company voluntary arrangements (CVAs). CVL numbers were lower than in January 2023, while compulsory liquidation and administration numbers were higher.

Individual Insolvencies

For individuals, the total number of insolvencies in January 2024 was 8,089, 4% higher than in the same month in the previous year (7,756 in January 2023).

The individual insolvencies consisted of 768 bankruptcies, 2,793 debt relief orders (DROs) and 4,528 individual voluntary arrangements (IVAs). The higher number of individual insolvencies compared to January 2023 was driven by a 60% increase in the number of DROs and a 20% increase in the number of bankruptcies, while the number of IVAs was 16% lower. IVA numbers in 2023 were lower than in 2022, which saw a record high annual number. DRO and bankruptcy numbers in 2023 were higher than in 2022, although the number of bankruptcies remained well below pre-2020 levels.

There were 8,356 Breathing Space registrations in January 2024, which is 10% higher than the number registered in January 2023. 8,232 were Standard breathing space registrations, which is 10% higher than in January 2023, and 124 were Mental Health breathing space registrations, which is 27% higher than the number in January 2023.

• During 2021/22, 802 directors were disqualified under the Company Directors Disqualification Act (CDDA) 1986 as a result of the work of the Insolvency Service. The number of director disqualifications in 2021/22 was lower than in 2020/21. Before the coronavirus (COVID-19) pandemic, the number of disqualifications had been stable at between 1,200 and 1,300 between 2013/14 and 2019/20. Lower numbers in 2020/21 and 2021/22 coincided with historically low numbers of company insolvencies during the pandemic.

• The mean average length of director disqualification in 2021/22 was 5 years and 10 months. The average length has been between 5 years and 5 months, and 6 years in each of the past ten financial years.

• During 2021/22, 52 companies were wound up in the public interest, up ten cases from the previous financial year, but lower than in all previous years in the time series. Numbers of these orders declined followed a legislative change in 2016, which increased the number of regulatory and enforcement bodies to which the Insolvency Service could disclose material. In some cases, allowing disclosure to these additional bodies has been more effective than winding up the company.

• For director disqualification outcomes in 2021/22, the most common allegation made was ‘Unfair treatment of the Crown’, which was an allegation in 297 cases, accounting for 37% of all allegations. The second most common was the 141 allegations (17%) relating to COVID-19 financial support scheme abuse.

• During 2021/22 there were 314 bankruptcy and debt relief restrictions orders and undertakings, similar to the 302 in 2020/21, but lower than levels seen before the coronavirus pandemic. The past two years have seen the lowest levels in the time series going back to 2009/10. The lower numbers of restriction orders coincided with a fall in the number of bankruptcies during the same period.

• As at 31 March 2022 there were more than 6,500 former directors with active disqualifications and over 2,000 individuals subject to bankruptcy and debt relief restrictions.

• During 2021/22, 130 individuals faced criminal charges brought by the Insolvency Service, and 119 were convicted. These numbers were higher than all previous years back to 2016/17.

• There were 424 separate sentences imposed in 2021/22 relating to charges brought by the Insolvency Service. The most common sentences imposed were community orders, which include a range of requirements such as unpaid work, curfews or periods of supervision.

From the start of the coronavirus pandemic until mid-2021, overall numbers of company and individual insolvencies were low when compared with pre-pandemic levels. Bankruptcy and compulsory liquidation numbers remained lower for the entirety of the 2021/22 financial year. Numbers of enforcement outcomes for 2020/21 and 2021/22 are likely to have been affected by this decline in insolvency numbers. Further information on insolvency trends can be found in the published Quarterly and Monthly "https://www.gov.uk/government/collections/insolvency-service-official-statistics">Insolvency Statistics.

Main Messages for England and Wales

The number of registered company insolvencies in May 2023 was 2,552, 40% higher than in the same month in the previous year (1,825 in May 2022). This was higher than levels seen while the Government support measures were in place in response to the coronavirus (COVID-19) pandemic and also higher than pre-pandemic numbers.

There were 189 compulsory liquidations in May 2023, 34% higher than in May 2022. Numbers of compulsory liquidations have increased from historical lows seen during the coronavirus pandemic, partly as a result of an increase in winding-up petitions presented by HMRC.

In May 2023 there were 2,181 Creditors’ Voluntary Liquidations (CVLs), 38% higher than in May 2022. Numbers of administrations and Company Voluntary Arrangements (CVAs) were higher than in May 2022.

For individuals, 617 bankruptcies were registered, which was 5% higher than in May 2022, and around half of pre-2020 levels.

There were 2,505 Debt Relief Orders (DROs) in May 2023, which was 23% higher than May 2022. Monthly DRO numbers may be volatile at present due to the introduction of new https://moneyandpensionsservice.org.uk/2022/11/24/money-and-pensions-service-signs-contracts-for-national-and-business-debt-advice-services-and-the-administration-of-debt-relief-orders-in-england/">DRO hubs.

There were, on average, 6,767 Individual Voluntary Arrangements (IVAs) registered per month in the three-month period ending May 2023, which is 14% lower than the three-month period ending May 2022.

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 the previous year. Seasonally adjusted figures that more accurately measure trends over time are available in the "https://www.gov.uk/government/collections/insolvency-service-official-statistics">quarterly insolvency statistics.

• During 2020/21 there were a total of 972 director disqualifications under the Company Directors Disqualification Act (CDDA) 1986, as a result of the work of the Insolvency Service. The number of director disqualifications in 2020/21 was lower than in 2019/20. Previously, the number of disqualifications had been stable at between 1,200 and 1,300 for the past seven years.

• The mean average length of director disqualification in 2020/21 was 5 years and 6 months, similar to the average length of disqualification enforced in the previous two financial years.

• During 2020/21 there were 42 companies wound up in the public interest, down 10 cases from the previous financial year, and continuing the long-term decline in the number of companies wound up in the public interest. The decline followed a legislative change in 2016, which increased the number of regulatory and enforcement bodies to which the Insolvency Service could disclose material. In some cases, allowing disclosure to these additional bodies has been more effective than winding up the company.

• During 2020/21 there were 302 bankruptcy and debt relief restrictions orders and undertakings, compared with 470 in 2019/20. This is the lowest level in the time series since 2009/10. The decline in the number of bankruptcy restriction orders in 2020/21 coincided with a fall in the number of bankruptcies during the same period.

• As at 31 March there were over 6,800 former directors with active disqualifications and over 2,200 individuals subject to bankruptcy and debt relief restrictions.

• During 2020/21 there were 56 individuals who faced criminal charges, and all were convicted.

• There were 189 separate sentences imposed in 2020/21. The most common sentences imposed were community orders, which include a range of requirements such as unpaid work, curfews or periods of supervision.

The numbers of individual and company insolvencies during 2020/21 were lower than recent historical levels. This is likely to have been driven by Government measures put in place to support businesses and individuals during the coronavirus (COVID-19) pandemic. Further information on insolvency trends can be found in the published Quarterly and Monthly Insolvency Statistics.

Impacts associated with the coronavirus pandemic are also likely to have contributed to the lower volume of enforcement outcomes in 2020/21 compared to pre-pandemic levels, in particular the short-term reduced operational running of HM Courts & Tribunals Service.