The Insolvency Service have now released the latest statistics for the final quarter of 2017 which allows us to analyse the year of 2017 as a whole.

The key messages that stand out are;

Companies in 2017

People in 2017

  • In 2017, one in 467 adults became insolvent
  • Total insolvencies rose for the second consecutive year returning to the levels seen in 2013 and 2014, driven by Individual Voluntary Arrangements, which reached the highest recorded annual total.

Here we look at each area in a little more detail and highlight the key findings for last year.

Corporate Insolvencies

An estimated total of 17,243 companies entered insolvency in 2017, an increase of 4.2% on 2016. This was driven in the main by an increase of 8.2% in Creditors’ Voluntary Liquidations (CVLs)

The total was inflated by two ‘bulk insolvency’ events (where large numbers of connected companies enter insolvency following industry/legal changes) which accounted for an estimated 2,131 of the total.

Excluding these two bulk events, 15,112 companies still entered insolvency. This represents a 2.5% increase on 2016, and was driven by a 6.3% rise in the underlying number of CVLs.

Most company insolvencies were resolved by CVLs. Of the 17,243 insolvent companies, 12,861 used CVLs, making up 74.6% of total insolvencies.

Compulsory liquidations (2,799) equated for 16.2% of total company insolvencies, Administrations (1,289) 7.5% and Company Voluntary Arrangements (292) 1.7%.

The year-end liquidation rate was 0.47% of active companies; the same level as for 2016.

Personal Insolvencies

The number of people who became insolvent in England and Wales in 2017 as 99,196, this was a 9.4% rise on 2016 and returning to the levels of 2013 and 2014.

Of the total of 99,196, 59.7% of people entered into Individual Voluntary Arrangements (IVAs), 25.01% into a Debt Relief Order (DRO) and 15.2% Personal Bankruptcy

There were 59,220 Individual Voluntary Arrangements (IVAs) in 2017, an increase of 19.8% on 2016

However, the number of Debt Relief Orders fell by 5% to 24,894 compared to the previous year.

In 2017 there were 15,082 Bankruptcy Orders, an increase of 0.3% on 2016. Debtors petitions increased by 5.9%, whilst creditor petitions fell 15.8%.

Focus Insolvency’s Managing Director, Anthony Fisher, comments

“Unsurprisingly both corporate and personal insolvencies increased in 2017 in a challenging environment for both businesses and individuals. I expect this trend to continue during 2018 in this challenging climate and therefore it is essential that close attention is paid to cash flow and debt levels and professional advice obtained if any issues are anticipated.  Free advice is available and it’s worth planning for all contingencies and seeking this advice at an early stage. The sooner advice is sought the more options tend to be available for rescue and recovery”

Can we help?

If you have a client who is experiencing financial difficulties, or if you would like to discuss anything that has caught your eye in this blog post, please get in touch! Focus Insolvency Group specialise in recovery solutions and are keen to help individuals and businesses get back on their feet.

Sources: Statistics and data provided by The Insolvency Service