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R3 comments on the Scottish Insolvency Statistics, Q1 2017-­18

Commenting on the Scottish Insolvency Statistics, April to June 2017 (Q1 2017-­18), Tim Cooper, Chair of R3 in Scotland, the insolvency trade body says:

Personal insolvencies:

  • The number of personal insolvencies (bankruptcies and protected trust deeds) in Scotland rose by 12.8% in Q1 2017-18 compared with Q4 2016-17, and rose by 17.3% compared with Q1 2016-17.

“Personal insolvencies are continuing the rising trend seen over the past two years.

“As Scotland’s unemployment rate is at a 25-year low, the rise is perhaps a little counter-intuitive. But looking beyond the headline unemployment rate, the number of economically inactive people in Scotland has risen since 2016, meaning that more people are on fixed incomes, and thus on the whole more exposed to higher inflation.

“The supply of consumer credit is – at the moment – fairly plentiful; but should this situation change, and credit become more expensive and harder to obtain, we might see a further rise in personal insolvencies.

“Research by R3 and ComRes found that 64% of Scottish adults are not at all worried about their current level of debt, higher than the average for all British adults of 59%. However, 43% of Scottish adults say they often or sometimes struggle to make it to payday, which is three percentage points higher than the average for all British adults.

“Anyone struggling with their finances should seek information and support from a licenced professional as early as possible.”

Corporate insolvencies:

  • The number of corporate insolvencies in Scotland rose by 29% in Q1 2017-18 compared with Q4 2016-17, and fell by 24.5% compared with Q1 2016-17.

“The rise in corporate insolvencies in Q1 2017-18 compared with Q4 2016-17 is a reflection of the tricky environment that Scottish firms have found themselves operating in recently, as has been the case everywhere in the UK. The corporate insolvency rate has been more or less flat for the past few years, with relatively small increases and decreases quarter by quarter. It’s worth noting, however, that corporate insolvencies are lower than they were this time last year.

“There is a mixed picture for businesses. Research by R3 found that, in July, Scotland had the lowest rate of companies at greater than normal risk of insolvency of any part of the UK, at 21.8% - 5.5 percentage points lower than the UK average. The rate of firms at elevated risk has been growing since January 2017 though, which may have contributed to the increase seen in the figures released today.

“While Scotland’s GDP grew by 0.8% in the first three months of 2017, it contracted by 0.2% in the final three months of 2016, meaning uncertainty for firms. Rising inflation has not apparently led to greater upward pressure on wages, despite the low unemployment rate, but has meant higher input costs for manufacturers, and has dented consumer confidence.

“The economic outlook is still uncertain, meaning it’s more vital than ever for firms facing difficulties to take action to get themselves back on track, and to prepare for tougher trading conditions. Advice from a licenced professional is one option to consider, with early intervention leading to better outcomes.”

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.