Insolvency Service Statistics Q3 (personal and corporate insolvency)
“With corporate insolvency numbers down 20% across the board compared to the same quarter a year ago, we are clearly not following typical post-recessionary trends when corporate insolvency numbers have always continued to rise. Current fiscal and monetary policies such as Time to Pay agreements and low interest rates, coupled with a more supportive attitude from the banks has kept numbers down.
However, these factors cannot remain with us forever, and we could be benefitting from a ‘calm before the storm’. Research by R3, the insolvency trade body reveals that one in five businesses (19%) are worried about their current debt levels and should servicing debt become more expensive, this could trigger more corporate insolvencies.
Our members, the UK’s insolvency practitioners, are predicting an increase in corporate insolvency numbers next year to 27,500 insolvencies (in 2009 the figure was 26,400) while nearly 400,000 businesses have relied upon on delaying outstanding payments to the crown and we should not assume 2011 will automatically be smooth sailing. We would urge any business concerned about its current debt levels to use these benign conditions to seek advice early to prepare for whatever next year brings.”
“Personal insolvency remains at near record levels, on a steeply upward path since 2004 with 1 in 311 people becoming insolvent this quarter compared to an annual average of 1 in 575 over the last 25 years. These official figures are only the tip of a debt iceberg with nearly 1 million individuals struggling with debt, but not seeking advice, and a further 500,000 currently in informal debt management plans unrecorded in these figures. Increases in unemployment would obviously trigger more personal insolvencies, and seeking advice early is the only way to deal with this stressful situation.”
Steven Law, President of R3, the insolvency trade body
R3 Press Office