UK individual insolvency statistics - Q4 2020

The October to December 2020 (Q4) individual insolvency stats for England and Wales have been published by The Insolvency Service, together with related figures for Scotland and Northern Ireland.

Individual Insolvency Stats Q4 2020

Individual insolvency statistics for England and Wales – 2020

There were 111,424 individual insolvencies in 2020, a 9 per cent decrease on 2019. In 2020, there were a total of:

  • 78,478 individual voluntary arrangements (IVAs) – a 1% increase from 2019
  • 20,321 debt relief orders (DROs) – a 25% decrease from 2019
  • 12,625 bankruptcies – a 25% decrease from 2019

Numbers of bankruptcies in 2020 were the lowest since 1990, and DRO numbers were the lowest since they were introduced in 2009.

Prior to 2020, bankruptcies had remained relatively stable since 2015, with between 15,000 and 17,000 per year. DROs had remained stable since 2012, with between 24,000 and 28,000 annually. The annual number of registered IVAs in 2020 from the previous year, though the percentage increase from 2019 was small (just 1 per cent). This is in contrast to the previous four years where IVAs had been increasing year-on-year by 10-20 per cent.

Individual insolvency statistics for England and Wales – Q4 2020

In Q4 2020, there were a total of 31,059 individual insolvencies, including:

  • 23,812 IVAs
  • 4,223 DROs
  • 3,024 bankruptcies

Total individual insolvencies in Q4 2020 increased by 57 per cent from Q3 2020 and were 9 per cent higher when compared to Q4 2019. The increase in individual insolvencies in Q4 2020 was driven by a 90 per cent increase in IVAs from Q3 2020.

However, the Insolvency Service urge caution when interpreting the numbers, as IVAs are counted within these statistics once they are registered with the Insolvency Service and are reported by quarter of registration. There can be a time lag between the date on which the IVA is accepted (known as the date of creditor agreement) and date of registration by licensed insolvency practitioners working for firms that specialise in this area. Changes in volumes of registered IVAs may be due in part due to changes in how these firms operate.

The number of bankruptcies in Q4 2020 increased by 9 per cent from the previous quarter but were 27 per cent lower than during the same quarter last year. Numbers in each quarter since Q2 2020 have also been the lowest seen since 1990. Bankruptcies in Q4 2020 consisted of:

  • 2,7361 debtors’ applications
  • 2,801 creditors’ petitions

Individual insolvency rate statistics for England and Wales – Q4 2020

In the 12 months ending Q4 2020:

  • 1 in 420 individuals became insolvent
  • the individual insolvency rate was 28.3 per 10,000 adults in England and Wales
  • the individual insolvency rate was higher in the 12 months ending Q3 2020 due to the high number of IVAs, however it was lower than in the same quarter a year ago

Unlike the absolute number of individual insolvencies over a period, the individual insolvency rate indicates the probability of a person entering insolvency in the previous four quarters. In general, periods of economic growth result in individual insolvency rates decreasing.

Individual insolvency statistics for Scotland – Q4 2020

The Accountant in Bankruptcy, Scotland’s Insolvency Service, administers individual insolvency in Scotland.

They reported that in Q4 2020, there were 2,053 individual insolvencies individual insolvencies in Scotland, decrease of 38 per cent when compared to the same quarter of the previous year. Of the total individual insolvencies in Scotland in Q4 2020, there were:

  • 623 sequestrations (of which 428 went into sequestration via the minimal asset process route)
  • 1,430 protected trust deeds

Individual insolvency statistics for Northern Ireland – Q4 2020

In Northern Ireland in Q4 2020, there were 378 individual insolvencies, a 42 per cent decrease when compared with the same quarter of the previous year. Of the total individual insolvencies, there were:

  • 278 IVAs
  • 50 bankruptcies
  • 50 DROs

Please note, individual insolvency in Northern Ireland is governed by separate, but broadly similar, legislation to England and Wales, and so figures are presented separately.

Next insolvency statistics release

Figures for Q1 2021 will be released on 30 April 2021 at 9.30am.

You can see all personal insolvency notices in The Gazette.

See also

Company insolvency statistics – Q4 2020

Monthly UK insolvency statistics - December 2020

What you need to know about Corporate Insolvency and Governance Bill

Find out more

Individual Insolvency Statistics, October to December 2020 (GOV.UK)

The Insolvency Service (GOV.UK)

Accountant in Bankruptcy (AiB)

Image: Getty Images

Publication date: 29 January 2021