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Insolvency Stats – October – December 2016 (Q4)

On 27 January 2017, the latest stats were released by the Insolvency Service, containing data on company insolvencies and individual insolvencies from October to December 2016.

2017 will be an important test for both companies and individuals. The implications of Brexit and how our currency will be effected once Article 50 is triggered are still to be seen.

Many larger firms will have been protected from the pound’s fall by currency hedges or long-term fixed-price contracts, however, these will likely unwind or end this year.

Businesses have been protected from the pound’s fall by currency hedges or long-term fixed-price contracts however, these will likely unwind or end this year.

Businesses have been buoyed by resilient consumer spending since the EU referendum but much of this is on the back of increased borrowing. It is not clear how sustainable such substantial borrowing will be for both businesses and individuals.

Here’s a brief overview of the data:

Companies in 2016

  • The total number of company insolvencies was higher in 2016 than in the previous year. This was primarily caused by 1,796 connected personal service companies entering liquidation on the same date following changes to claimable expenses rules to address a tax loophole.
  • Looking beyond the insolvent personal service companies, the underlying number of company insolvencies was broadly unchanged in 2016 compared with 2015.

 

Individuals in 2016

  • The total number of individual insolvencies rose in 2016 but were at the second-lowest level in 11 years.
  • The increase in 2016 was driven primarily by an increase in individual voluntary arrangements, which returned to the level seen from 2009 to 2014.
  • The total number of bankruptcies fell in 2016.
  • The number of debt relief orders rose in 2016 because of a change to eligibility criteria which allowed more people on low incomes and with few assets to deal with small, but problem debts.
  • It’s important to remember that the government’s personal insolvency statistics do not include the thousands of people who are still in non-statutory debt management plans.

 

The latest quarter (Q4 2016)

  • The underlying number of company insolvencies rose compared with the previous quarter, and with Q3 of 2015, driven by an increase in compulsory liquidations.
  • Individual insolvencies decreased compared with the previous quarter but were higher than in Q3 of 2015, driven by individual voluntary arrangements and debtor application bankruptcies.

 

The link containing the full release of Insolvency statistics set out in various formats and tables is as follows:

https://www.gov.uk/government/collections/insolvency-service-official-statistics

Posted on February 2, 2017

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