Insolvency Figures For Third Quarter Of 2017

Published 27 October 2017

The latest Insolvency Service figures for corporate and personal insolvencies for the third quarter of 2017 for England & Wales were issued on Friday 27 October.  Total corporate insolvencies decreased in Q3 compared to the previous quarter, however again the figures were skewed by 1,131 connected Personal Service Companies (PSCs) entering liquidation simultaneously in Q2. With this skewing omitted, an estimated 1 in every 237 companies entered into liquidation in Q3.

Personal insolvencies increased in the third quarter, thanks to an increase in individual voluntary arrangements (IVAs) – which reached a record high. In the 12 months ending Q3 2017, the rate of insolvency was 21 per every 10,000 adults (or 1 in 477) – which is the highest level seen since the 12 months ending Q4 2014.

  No. in quarter % change on previous quarter % change on same period last year
Corporate - Total Companies 4,152 15.00 14.50
Company Liquidations 665 -2.10 4.60
Receiverships 0 0.00 0.00
Administrations 320 -1.10 -12.70
Company Voluntary Arrangements 80 -3.60 14.30
Personal - Total Individuals 25,479 10.60 7.70
Bankruptcies 3,682 -2.20 -5.20
Individual Voluntary Arrangements 15,523 18.30 16.80
Debt Relief Orders 6,274 2.10 -3.30

Source: Insolvency Service

Corporate

Key Findings for Q3 2017

Total corporate insolvencies decreased by 12.5% compared to Q2 2017. However, removal of the 1,131 connected PSCs shows that the underlying liquidation rates have actually risen by 15% compared to Q2 and 14.5% compared to Q3 in 2016.

This was driven by a rise in Creditors' Voluntary Liquidations (CVLs) – which rose by 22.2% compared to Q2 2017 and by 21.2% compared to Q3 2016.

There has been a stability to other types of corporate insolvencies, with compulsory liquidations falling by 2.1% on the previous quarter. This was 4.6% higher than in Q3 2016. Both Company Voluntary Arrangements (CVAs) and administrations were lower than the previous quarter.

There were no administrative receiverships in Q3 2017. There has been a tendency for less than 10 such cases per quarter since 2012, as this procedure has been restricted to particular company types or floating charges before September 2003.

Once again, ignoring the PSCs, the figures reflect that the construction industry continues to be the area where most companies will become insolvent, with the wholesale and retail trade  (including vehicle repair) being second highest, followed by accommodation & food service. 

Source: Insolvency Service and Companies House (numbers in '000s)

Personal

Key Findings for Q3 2017

Personal insolvencies have risen by 10.6% this quarter; creating a new record quarter. This has once again been due to an increase in IVAs, up by 18.3% compared to the previous quarter. With 15,523 IVAs in Q3, we are seeing the largest quarterly number since their introduction in 1987, accounting for over 60% of personal insolvencies.

In contrast, the number of bankruptcies fell by 2.2% on the previous quarter. Debtor’s own applications increased slightly once again (by 1.6% compared to Q2 2017) but are still 3.7% lower than this time last year. Bankruptcies on a creditor’s petition were lower than this time last year by 5.2% and by 13.3% against Q2 2017. This number continues to dwindle thanks to the change in the required minimum debt owing to a creditor in order to petition for someone's bankruptcy, which was increased from £750 to £5,000 in 2015.

There were fewer bankruptcies attributed to the self-employed sector, with a 3.1% reduction from Q2 to Q1 2017 (figures in this sector have a lag of one quarter because it can take a number of weeks for trading status to be recorded following the date of the bankruptcy order), and a 4.6% reduction from 2016 figures – a trend which seems to be quite stable.

 

Source: Insolvency Service