The Stats: Unpacking National Statistics’ latest Individual Insolvency report
Released on the 30th July 2021, the Office for National Statistics latest report on individual insolvency has been made accessible for online viewers. The report accounts for any individual who has begun the formal insolvency process as a result of unpaid debts in England, Wales, Scotland and Northern Ireland. In this article, we will summarise and unpack some of the report’s primary findings in a brief overview of this complex situation.
One of the report’s most significant findings is the decrease in individuals entering insolvency in comparison to last year’s figures. Out of 10,000 adults, 22.6% were found to have entered insolvency between 1st July 2020 and 30 June 2021 which marks a 3.2% decrease from the 25.8% of adults from the previous year.
Similarly, DRO’s (debt relief orders) and bankruptcies have also remained low since the start of the UK’s first national lockdown on 23rd March 2020. This drop in figures is most likely the result of the government-led insolvency interventions established during the Covid-19 pandemic which provided citizens with greater financial support and flexibility.
The number of individual insolvencies in Q2 2021 has decreased by 4% (27,662 cases) since the previous quarter and, even more significantly, by 14% since Q2 2020. Registered bankruptcies in Q2 2021 also followed a similar pattern with a decrease of 9% from the previous quarter which means that the number of UK bankruptcies has reached the lowest level since 1990. The report continues to find that nearly 90% of all UK bankruptcies in this quarter are the result of applications by debtors which, similarly, were the lowest level seen since 1998.
Q1 2021 saw 381 bankruptcies of self-employed individuals which represents a 24% decrease since Q4 2020. This is also a huge 56% lower than the previous year. Again, this data demonstrates dramatic decreases in insolvency thought to be attributed to greater government intervention in citizens’ financial affairs. However, it is worth noting that this data concerning bankruptcies by self-employment has been delayed by one quarter as a result of the time taken for trading statuses to be recorded.
The launch of the Breathing Space scheme protects citizens from creditors for a total of 60 days and can halt any enforcement actions. This scheme aims to account for the debilitating effects of insolvency on an individual’s mental health. Launched on 4th May 2021, the scheme received 11,747 registrations between then and 30th June 2021.
Whilst this scheme cannot be counted as an insolvency procedure, the Office for National Statistics made the decision to include such data in order to reflect the number of UK individuals facing debt problems.
Monthly statistics on the Individual Insolvency are also published by the Insolvency Service which can provide a more detailed analysis of monthly (as opposed to quarterly or annually) insolvency data.
If you are facing bankruptcy or insolvency, contact Asset Solutions today. We are industry specialists that provide unrivalled assistance to individuals seeking a bankruptcy annulment. Our expert team will guide you through the process and support you with any necessary advice. Stop bankruptcy and get in touch today on 0800 689 3861.
