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Q4 2014 insolvency statistics – R3 comments

Louise Brittain, Council Member of R3, the insolvency trade body, comments on this morning’s Q4 2014 insolvency statistics:


“This year has seen the continuation of the trend of falling bankruptcies and Debt Relief Orders. Individual Voluntary Arrangements are now firmly the dominant form of personal insolvency.”

“Personal insolvencies will probably hover around the 100,000 a year mark, although it should be remembered that this is only part of the picture as this figure does not include debt management plans. The explosion of personal debt before the financial crisis means that this ‘new normal’ level of insolvencies is far higher than it was at the turn of the century.”

“The last quarter of the year tends to be quieter for new insolvencies. With Christmas festivities approaching, many people with debt problems put off making decisions or taking action until the New Year.”

“Although falling inflation has eased pressure on household finances, the fall could be partially the result of deep-seated consumer debt problems: inflation’s falling because people aren’t spending, and one reason people aren’t spending is because there’s still a lot of burdensome consumer debt out there. People expect that interest rates will inevitably rise and, rather than going out and continuing to spend, may be trying to pay down as much debt as they can ahead of that time.”

“It is unlikely HMRC’s new ‘notices to pay’ will be having an effect on bankruptcy numbers. This may happen eventually, but a change in the bankruptcy creditor petition threshold from October means these ‘extra’ bankruptcies may be cancelled out by fewer ‘low value’ bankruptcies.”


“Although corporate insolvency has fallen over 2014, it’s notable that compulsory liquidations have risen slightly. This may be a sign that creditors may be becoming less lenient to debtors than they have been since the financial crisis.”

“Overall though, despite a very slight rise in insolvencies in the last quarter, low interest rates and falling inflation are combining to help keep insolvencies low. The number of companies going through an insolvency process is almost down to pre-financial crisis levels, although it’s taken seven years to get to this point.”

“In the short-term, the first quarter of the year often sees an increase in insolvencies as companies whose Christmas revenues failed to meet expectations consider their options. After that, market changes and economic uncertainty caused by election results here and in particular, abroad could also have an effect.”

“How big an impact eventual interest rate rises will have on businesses remains unknown. Although initial rate rises are likely to be very small, there are many businesses – and households – already at their financial limits.” 

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see for further information.

  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by recognised professional bodies
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.