Scotland insolvency statistics Q2 2021, R3 in Scotland response

28 July 2021

• The number of corporate insolvencies (liquidations and receiverships) in Scotland rose by 79.1% in April-June 2021 (163) compared with January-March 2021 (91), and rose by 64.6% compared to April-June 2020.
• Creditors’ Voluntary Liquidations rose to 132 for April-June 2021 – an increase of 131.5% on January-March’s figures (56) and of 131.6% on April-June 2020’s figures (57).
• The number of personal insolvencies (bankruptcies and protected trust deeds) in Scotland rose by 12.3% to 1,884 in April-June 2021 compared with January-March 2021’s figures of 1,677, and was 9.6% lower than in April-June 2020.

Commenting on the Scottish insolvency statistics for April-June 2021, Iain Fraser, Chair of insolvency and restructuring trade body R3’s Scottish Technical Committee, says:

“The quarterly increase in corporate insolvencies was driven by an increase in Creditors’ Voluntary Liquidations in June – to the highest total number for this process in two years.

“The corporate insolvency figures published today reflect the tough three months the Scottish business community has been through. With an uneven easing of restrictions across the country, a number of businesses are still adapting to the ‘new normal’ and will have to wait a while before they return to pre-pandemic trading.

“However, in spite of this, there are some reasons for optimism. Scotland’s economy continues to recover, and business confidence in Scotland rose to the highest level in the UK in June, although times remain tough for the retail, hospitality and nightlife industries.

“Alongside this, we’re seeing a drop in unemployment, an increase in the number of job vacancies, and more people returning to work from furlough as the economy reopens.

“Hopefully the tide will start to turn for businesses as restrictions ease further in August, the vaccine rollout continues, and the economy continues to reopen and recover.

“On the personal insolvency side, the increase shown in the figures published today can be attributed to a rise in both protected trust deeds and bankruptcies.

“Although people are more optimistic about the future, there is still a long way to go before we return to pre-pandemic levels of positivity, and, while confidence is growing, people are more cautious about spending money than they were a year ago. 

“There’s no doubt that the support measures have been a valuable safety net for many people, as well as a great number of businesses, but they haven’t been able to help everyone. Some households have managed to save and reduce their debts during the pandemic, while others, usually those on lower incomes, have faced financial challenges.

“Anyone who is worried about their business or personal finances should seek advice as soon as possible – and seek it from a qualified source. It can be very, very difficult to talk about money, but starting the conversation early will mean you have more potential solutions in front of you than if you’d waited – and more time to work out which option is best for you.