Insolvencies up during July 2021

In England and Wales there were 1,094 registered insolvencies in July 2021, which was 13% higher than during July 2020, but 24% lower pre-pandemic (July 2019). The overall reduction was mainly due to a lower number of compulsory liquidations.

There were 1,007 creditors’ voluntary liquidations in July 2021 - which was similar to pre-pandemic levels. As for individuals, there were 620 bankruptcies registered - 34% lower than July 2020 and 58% lower than July 2019.

The number of debt relief orders (DROs) handed out in July 2021 were, however, at their highest level since the start of the pandemic - with 1,864 DROs registered. This followed on from the changes in the eligibility criteria on 29 June, including an increase in the level of debt at which people can apply for a DRO from £20,000 to £30,000.

Commenting on the news, insolvency trade body R3’s president Colin Haig said: “Although government support has continued to provide a lifeline for many businesses which would have otherwise struggled in an economic climate like this, this July was still a challenging month.
 
“With the opening up of the economy, consumer confidence at pre-pandemic levels, and spending levels higher than they were in 2019, the future does look more optimistic. Having said that, it will take longer for the worse-hit sectors to recover from the pandemic.
 
“SMEs are the backbone of the UK economy, but many have been badly affected by the pandemic. The restructuring community is better placed than ever to help them and other organisations with financial worries, but if directors leave it too late to ask for help, they will have fewer rescue or recovery options open to them.”