The number of companies in England and Wales that became insolvent, which means being unable to pay debts and entering liquidation, administration or other company rescue process, has decreased year-on-year, according to the UK government’s Insolvency Service.
In the publication of its latest figures on Thursday, the Insolvency Service revealed that an estimated total of 3,539 companies entered insolvency in the third quarter of 2015, 4.4% less than in the second quarter of this year and 10.2% lower than the third quarter last year.
Compulsory liquidations were found to be at the lowest level since the third quarter of 1989, with a total of 612 companies subject to a compulsory winding-up order in the third quarter this year, a 20.4% decrease on the second quarter 2015 and 29.2% lower than the third quarter of 2014. These figures were said to be the main driver of the decrease in total company insolvencies.
Creditors’ voluntary liquidations have continued to decrease since the second quarter of 2013, with an estimated 2,451 companies entering creditors’ voluntary liquidation in the third quarter this year, a 0.7% decrease on the previous quarter and 4.3% lower compared to the same period in 2014. There were an estimated 363 administrations in the same period, a decrease of 2.4% compared to the previous quarter and 5.5% lower than the same quarter last year. Also, there were an estimated 111 CVAs in the third quarter 2015, a rise of 32.1% on the previous quarter, but 14.6% lower than the same period of 2014.
In the 12 months ending Q3 2015, 0.46% of active companies were estimated to have entered liquidation, the lowest level since comparable records began in the last quarter of 1984.
Individual insolvencies, people who are unable to pay debts and enter formal procedures, decreased year-on-year during the third quarter 2015 in England and Wales, but were higher than in the second quarter of 2015. This quarterly rise was a result of an increase in individual voluntary arrangements, the first since the second quarter last year.
Insolvency Service data showed that there were a total of 19,683 individual insolvencies in the third quarter of this year, 2.8% higher compared to the previous quarter, but 18.5% lower compared to the third quarter last year.
Bankruptcy figures was at the lowest level since 1990, however there were a total of 3,857 bankruptcy orders in the third quarter 2015, which were recorded as 3.3% lower than the second quarter this year 2015 and 21.4% lower than the third quarter 2014. Bankruptcy orders has been decreasing since 2009, but the introduction of debt relief orders (DROs) in 2009 is thought to have affected the number of bankruptcies. There were 5,629 DROs in the third quarter 2015, a 3.5% decrease compared to the previous quarter and 17.3% lower compared to the same period last year.