Monthly insolvency statistics – December 2022

Corporate Insolvencies

England and Wales

Total corporate insolvencies continue to see month on month increases when compared to corresponding months both post and pre pandemic.  In December 2022 company insolvencies totalled 1,964. This was 32% greater than December 2021 (1489) and significantly higher, 76%, than December 2019 (pre COVID pandemic). 

Creditors Voluntary Liquidations (“CVLs”) totalled 1,659 and were 22% higher than December 2021 and 111% greater than in (pre pandemic) December 2019.

Compulsory Liquidations (“WUCs”) were 183 which is more than 3.6 times higher than December 2021 and importantly 8% higher than December 2019.

Administrations totalled 112 which is 56% higher than in December 2021 but 20% lower than pre pandemic levels.

CVAs (10) remain at low levels in December 2022, 43% higher than December 2021 but more than 52% lower than December 2019. 

Scotland

In December 2022 there were 114 company insolvencies registered in Scotland, 23% higher than December 2021 and 28% greater than December 19. This was comprised of 22 compulsory liquidations, 85 CVLs and 7 administrations. There were no receivership or CVA appointments.

Northern Ireland

In December 2022 there were 15 company insolvencies registered in Northern Ireland, 67% greater than December 2021 but 53% lower than December 2019. This was comprised of 11 CVLs, 2 compulsory liquidations and 2 administrations. There were no receiverships or CVAs.

Personal Insolvencies

England and Wales

Personal insolvency numbers continue to remain flat and show no real signs of increasing in the short term, but this cannot be sustained for an indefinite period. With energy prices volatile, rising mortgage costs and the cost-of-living crisis taking effect, personal insolvencies are almost certain to rise in the coming months and show a more marked increase in the second half of 2023.

It is interesting to see a distinction developing between the frequency of use of the different personal insolvency solutions available to address problems of indebtedness.

For example, we can see that Breathing Space (BS) applications have hovered around 5,600 per month since inception, and December saw a slight downturn in 4,803 applications being made – although the holiday period will undoubtedly have caused this slight dip.

112 Mental Health BS applications were made in December, against a monthly average of 91, and 4,691 Standard BS applications were made, against a 12-month average of 5,728.

Those using BS, may well be people with more pressing and immediate debts that elicit creditor pressure quickly. They will also be those people who are actively seeking help from the debt charity sector and being appropriately signposted to the correct solution. December’s figures probably represent a pause in those applying, waiting until the new year to actively address their indebtedness.

For the whole of 2022, the have been 70,546 BS applications, with 69,334 Standard BS and 1,212 Mental Health BS applications in the last 12 months. We expect that figure to be surpassed in 2023, as proper advice becomes more readily available to those in debt.

There has been an average of 7,552 Individual Voluntary Arrangements (IVA’s) in the 6-month period to November 2022 and 7,233 IVA’s recorded in December.

In 2022, there were a total of 87,757 IVA’s (2021 = 82,236; 2020 = 76,538) showing a marked upturn year on year.

Following the changes in criteria from June 2021, allowing easier entry into a Debt Relief Order (DRO), they have averaged 1,960 per month, with the December figure of 1,979 mirroring that average. We expect DRO’s to remain on a steady upward trajectory in 2023.

A “new” DRO would have previously been a bankruptcy and therefore, the DRO and bankruptcy graphs travelling in diverging directions is no real surprise. In December, there were only 397 bankruptcies, against a 12-month average of 555. Again, the holiday period would have caused some procrastination in filing for bankruptcy until early this year and we expect the numbers to pick up into 2023, probably into the second half of the year.

Bankruptcy petitions will undoubtedly have to be issued by creditors to recover debts incurred during the pandemic, and as a result of current economic pressures. We do expect to see creditor-driven bankruptcies begin to steadily increase in 2023.

In December, there were only 76 creditors’ petitions, which is down on the 12-month average of 94. The holiday period, in conjunction with the summer recess of the Courts, who are already experiencing significant backlogs, could explain the current delay in the upturn in creditor petitions, which were slowly starting to creep upwards following the pandemic stagnation.

One notable element to the creditor petition statistics is that HMRC have now crept to the top of the table of volume bankruptcy petitioners, which reflects the government’s intentions in relation to recovery of unpaid tax. Although corporate entities, who are engaging with HMRC, appear to be obtaining generous time to pay arrangements, individuals who are not engaging, appear to be facing no-nonsense enforcement.

Northern Ireland

In December 2022 there were 123 individual insolvencies in Northern Ireland, 52% higher than in December 2021, and 12% lower than December 2019. This consisted of 109 IVAs, 7 DROs and 3 bankruptcies.

_{Mazars is an internationally integrated partnership, specialising in audit, accountancy, advisory, tax and legal services*. Operating in over 90 countries and territories around the world, we draw on the expertise of more than 42,000 professionals – 26,000+ in Mazars’ integrated partnership and 16,000+ via the Mazars North America Alliance – to assist clients of all sizes at every stage in their development. *Where permitted under applicable country laws Mazars LLP is the UK firm of Mazars, an international advisory and accountancy organisation, and is a limited liability partnership registered in England with registered number OC308299. A list of partners’ names is available for inspection at the firm’s registered office, 30 Old Bailey, London EC4M 7AU. Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001139861.}