CCR Magazine

You are here  :Home arrow News arrow 2016 Q2 England & Wales Insolvency Statistics – R3 comments
Contact Us Newsletter Signup RSS Feeds

Latest News Headlines


Commercial Credit News


2016 Q2 England & Wales Insolvency Statistics – R3 comments PDF Print E-mail
Friday, 29 July 2016
Commenting on a fall in corporate insolvencies and a rise in personal insolvencies (announced today), Andrew Tate, president of insolvency and restructuring trade body R3, says: 

Personal insolvency (up)
“This is the most sustained rise in personal insolvency numbers since the financial crisis.”

“Personal insolvencies are far from their peak, but the rise in numbers is a concern. Although interest rates are at record lows, despite employment levels being high, and despite wages growing faster than inflation, people are still struggling to pay their debts.”

“R3’s latest Personal Debt Snapshot of over 2,000 British adults found 37% of British adults say they are at least fairly worried about their current level of debt. And 39% of British adults say they often or sometimes struggle to payday.”

“Looking forward, a post-referendum interest rate cut might help in future, but it might not be enough to offset the effect any post-referendum recession – if there is one – might have on personal finances.”

“The bigger rises in insolvencies we have seen in the second quarter this year and the third quarter last year may in part be because people are struggling with tax bills, which fall due at the start of the year. There’s a lag between when bills are due and when any consequent insolvency proceedings begin. The arrival of a large tax bill has always been a frequent cause of insolvencies.”

“It’s worth noting that Debt Relief Order numbers remain steady following reforms in October to make them more accessible to those with low debts but low assets. The easier it is for people to enter a debt relief solution appropriate to their needs, the easier it is for them to be financially rehabilitated more effectively.”

“Reforms to improve the accessibility to bankruptcy in April do not seem to have had much effect yet. A major concern for the insolvency profession, which was not entirely addressed by these reforms, is the up-front government and court fees for entering bankruptcy. These fees are prohibitive and stop people from accessing a debt solution appropriate to their needs. Worse, having cut the cost of entering bankruptcy to £655 in April from £705, the government put the cost up to £680 from July with little warning.”

Corporate insolvency (down)
“The cost of borrowing remains incredibly cheap for businesses and the last quarter saw better than expected GDP growth. These factors, combined with the high levels of creditor forbearance we have seen since the financial crisis, mean it’s not a surprise that the trend of falling corporate insolvency numbers has continued.”

“Other factors have helped bring insolvency numbers down, such as the rise of non-statutory restructurings. More companies are looking to repair finances outside of formal insolvency procedures and take action before it’s too late. Again, creditors, particularly banks, have played a role in pushing struggling debtors to seek help from the insolvency and restructuring profession before an insolvency procedure is their only option.”

“There is a possibility that uncertainty about the outcome of the EU referendum could have put some businesses in serious financial difficulty. And although it came at the end of the quarter, the result itself may have caused some businesses immediate problems. However, any ‘Brexit’ effect would be limited to a handful of companies, for now at least. Gloomy confidence indicators published in the last few weeks do not bode well for future insolvency numbers.”

latest issue

CCR Cover

The latest edition of CCR Magazine, the leading editorial publication in the UK credit industry, is out.

Read the latest issue online


CCR is the premier magazine for consumer and credit professionals. It provides an independent voice to the industry, breaking major news stories and running in-depth features.

As a magazine, it works with and campaigns on behalf of the credit industry to promote its importance as a centre of potential profit and business development to the wider business world.

Subscribe to CCR Magazine

CCR World Magazine


Providing information and analysis for thousands of senior credit professionals worldwide, every quarter.

Find out more

GTS Media Ltd
81 Cambridge Road

Registered in England No: 05483197