Personal insolvencies ‘likely to rise’

According to official figures from the Insolvency Service, overall numbers of company and individual insolvencies remained low in November 2020, when compared with the same month in the previous year. However, this was likely to be at least partly driven by government measures put in place in response to the coronavirus pandemic.

There were 889 company insolvencies in November 2020. Meanwhile, from a personal perspective, there were 1,425 debt relief orders and 927 bankruptcies over the same period and an average of 7,057 individual voluntary arrangements (IVAs) registered in each of the 3 months ending November 2020.

However, an analysis of 2019’s figures indicates that many individuals found debt hard to cope with even before the pandemic took hold, with the rate of personal insolvencies in England and Wales rising for the fourth year in a row in 2019, to 26.1 per 10,000 adults.

According to Insolvency Service figures, of the regions of England and Wales, the North East had the highest overall rate of personal insolvency, at 34.6 per 10,000 adults, while London had the lowest, at 15.6 per 10,000 adults.

At the same time, there is a huge range of variations in the figures, with women aged between 35 and 44 in the North East having the highest regional personal insolvency rate, at 75.4 per 10,000 adults, nearly three times the overall rate for England and Wales.

Meanwhile, the lowest regional level of personal insolvencies was found among women aged 65 or more living in the East of England, whose rate per 10,000 of 3.2 was over eight times lower than the England and Wales rate.

The final figures for  2020 may show a year on year fall in insolvencies but this is unlikely to reflect the true extent of how badly people have been hit by the pandemic, with people who had just been keeping their heads above water before the virus took hold likely to be devastated by a reduction in hours, job loss, or lack of childcare.

For help and advice on matters relating to insolvency, contact our expert team at Milsted Langdon today.

Posted in Insolvency.