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R3 comments on Q1 2016 Insolvency Service statistics

Commenting on the insolvency statistics (for January to March 2016) published by the Insolvency Service today, Phillip Sykes, president of R3, the insolvency trade body says:

Corporate insolvencies 

“Corporate insolvency numbers last rose at the start of 2014, and despite the rise this quarter, numbers are still well below where they were this time last year. However, UK businesses are starting to have a tougher time than they have had over the past few years.

“It should be noted, though, that the rise is driven by compulsory liquidations which indicates that creditors, probably including HMRC are beginning to lose patience with customers who are not paying their debts

“At the same time it is interesting to see that the estimated liquidation rate is at its lowest level since comparable records began in 1984, this is a sign of the continuing strength of the economy.

“There has been a drop in the number of administrations which may be down to the increasing move by the insolvency profession and lenders to embrace restructuring outside of formal insolvency processes.

“Creditor voluntary arrangements are their lowest since 1998. These are primarily used by the retail sector, and until headlines this week, there hadn’t been a large number of retail failures at the very start of the year.

Personal insolvencies

“The first few months of the year can see higher numbers of insolvencies. People struggling with their finances may have been trying to get through to the New Year, but have not been able to turn their situation around.”

“Following rapid falls in insolvency numbers throughout 2014, insolvency numbers have been roughly level over the last year. Insolvencies in the first quarter are still lower than they were this time last year. While the return of real wage growth helped insolvencies fall in 2014-15, the gap between wages and inflation is getting smaller again, which might be putting pressure on household finances.”

“Changes in October 2015 to make it easier to enter Debt Relief Orders have led to a continued higher level of DROs than we saw throughout 2015.”

“Despite the quarterly increase, personal insolvencies – particularly bankruptcies – are at a historically low level. In fact, they are at their lowest level since Q4 1990. However, it should be remembered that the official figures don’t include those people in debt management plans. Until the Financial Conduct Authority starts to track the number of these plans, we won’t know the full extent of personal insolvency in England and Wales.”

“Serious indebtedness does remain a problem, even if it doesn’t show up in the insolvency numbers. According to our latest Personal Debt Snapshot of 2,000 adults’ personal finances, around 2-in-5 British adults say they are at least fairly concerned about their current level of debt.”


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.