Company insolvencies more than double

This is also 13% higher than the 1,346 seen in February 2020. Of the 1,515 insolvencies recorded in this month, there were 1,329 Creditors’ Voluntary Liquidations (CVLs) - doubling the number seen February 2021, with it also 40% higher than February 2020. 

The number of other types of company insolvencies - such as compulsory liquidations - remained lower than before the pandemic. However there were more than twice as many compulsory liquidations and almost double the number of administrations in February 2022 when compared to February 2021. 

Responding to this, insolvency and restructuring trade body R3’s vice-president Christina Fitzgerald said: “Sadly, the ending of the peak of the pandemic and the lifting of the final set of restrictions hasn’t led to the shot in the arm the business community had hoped for. 

“Although the economy grew in January and firms benefited from restrictions ending in February, it took time for footfall to increase - and will take a while before anything resembling normality returns. 

“Consumer spending has declined and consumer confidence is low as people worry about the economy and their own financial position, with inflation now a real problem for firms and individuals alike. This situation is unlikely to improve any time soon given the impact the war in Ukraine will have on energy costs.

“In addition to this, the restrictions on using winding-up petitions are coming to an end later this month - something which could see an increase in creditors turning to legal action to recover unpaid debts.” 

Month-on-month corporate insolvencies, however, decreased by 3.2%. This has been driven by a reduction in all types of corporate insolvencies - with the exception of administrations, which  increased to a 15-month high. 

Commenting on this, Fitzgerald said: “This increase suggests that there are a number of insolvent businesses which have some prospect for rescue, given this is one of the main statutory purposes of the administration process. 

“Wherever possible the insolvency profession will work to secure the rescue of businesses in administration to help ensure better outcomes for the business, its staff and its creditors.”

As for individuals, 588 bankruptcies were registered - which was 36% lower than February 2021 and 62% lower than February 2020. As for Debt Relief Orders (DROs), 2,242 took place in February 2022. 

There were, on average, 6,384 individual voluntary arrangements (IVAs) registered per month in the three-month period ending in February 2022. This is 4% higher than for the three month period ending in February 2021 and 15% more than the three months ending in February 2020. 

Responding to these figures, Fitzgerald said: “It’s clear that the economic issues of the last two years are starting to take their toll on people’s financial health. 

“In addition to the issues created by the pandemic, rising fuel and energy costs are a big concern for many and wages are failing to keep pace with inflation. As a result, there are a lot of people who are worried about their financial prospects in the months ahead.” 

Scotland registered 73 company insolvencies in February 2022 - this 181% higher than February 2021 but 15% lower than in February 2020. This 73 figure consisted of 10 compulsory liquidations, 60 CVLs and three administrations.

In Northern Ireland, 18 company insolvencies took place - which is three times as many as what was seen in February 2021 but 33% lower than February 2020. This comprised of 10 compulsory liquidations, four CVLs and four administrations. 

As for individual insolvencies, 162 took place in Northern Ireland - this 13% higher in February 2021, but 40% lower than February 2020. This consisted of 122 IVAs, 23 DROs and 17 bankruptcies.