May 2021 monthly insolvency statistics – R3 response

15 June 2021

• Corporate insolvencies increased by 8.8% to 1,011 in May 2021 compared to April's figure of 929, and increased by 6.9% compared to May 2020's figure of 946.
• Personal insolvencies fell by 14% to 8,482 in May 2021 compared to April's figure of 9,864, and were 38.7% lower than May 2020's figure of 13,838.

Duncan Swift, Immediate Past President of insolvency and restructuring trade body R3 and Restructuring and Insolvency Partner at Azets, responds to today's publication of the May 2021 corporate and individual insolvency statistics for England and Wales:

"Today's increase in corporate insolvencies has been driven by a rise in Creditors' Voluntary Liquidations, while administrations have fallen to the lowest number since the start of the pandemic. 

"On the personal insolvency side, the decrease in numbers compared with both last month and May 2020 can be attributed to a fluctuation in Individual Voluntary Arrangements, with numbers of bankruptcies and Debt Relief Orders holding more or less steady.

"While it's too early to say whether the mild increase in corporate insolvency numbers is the start of something bigger, times remain tough for businesses in the UK.

"Government support has held off rather than halted the economic damage of the pandemic, preventing a serious rise in insolvency levels, but many business owners are now having to look ahead to how they'll cope when these measures are withdrawn in the weeks and months ahead.

"Looking to the future, businesses are more confident about their ability to grow, but many are, quite rightly, still concerned about the continued effect of Covid restrictions. Business owners in some sectors will be feeling increasing concern at the prospect of another delay to the easing of lockdown in England, as announced by the Prime Minister yesterday.

"And although the economy continues to grow, there's still a lot of ground to make up to fully recover from the unprecedented economic contraction in April 2021. Consumer spending has increased, but it's still below 2019 levels, and while consumer confidence is improving, people are still worried about the future of the economy.

"When it comes to personal insolvencies, Government and private sector support has aided many people - with the furlough scheme protecting millions of jobs. However, those who have been furloughed may have struggled to cope with any reduction in salary, as well as the potential uncertainty around their employment.

"We hope the new Debt Respite Scheme, which gives people in debt a breathing space free from creditor pressure in which to seek help, will be taken up by more and more people, after its launch in early May.

"We know it can be tough to talk about financial concerns - whether they're personal or business - but doing so can make a huge difference. Anyone concerned about their financial situation should seek advice as soon as possible, so they can understand what options are available to them and so they have the most time to decide on an appropriate next step."