Saturday, 5 February 2011

Company insolvencies - Q4 2010 and 2010 Summary


There were 3,955 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the fourth quarter of 2010 (on a seasonally adjusted basis).  This was a decrease of 0.2% on the previous quarter and a decrease of 11.3% on the same period a year ago. 


This was made up of 1,200 compulsory liquidations (which are up 5.8% on the previous quarter but down 9.9% on the corresponding quarter of the previous year), and 2,755 creditors’ voluntary liquidations (which are down 2.6% on the previous quarter but down 11.8% on the corresponding quarter of the previous year). 


Additionally, there were 1,114 other corporate insolvencies in the fourth quarter of 2010 (not seasonally adjusted) comprising 302 receiverships, 642 administrations and 170 company voluntary arrangements. In total these represented a decrease of 24.0% on the same period a year ago.  Within this, administrations were down 24.4%. 


Graph 1. Company Liquidations in England & Wales (Thousands, seasonally adjusted)



2010 SUMMARY, ENGLAND AND WALES

There were 16,045 compulsory liquidations and creditors’ voluntary liquidations in total in 2010 – a decrease of 15.9% on 2009.

This was made up of 4,792 compulsory liquidations (which are down 15.1% on 2009), and 11,253 creditors’ voluntary liquidations (which are down 16.2% on 2009).

In 2010 there were also 4,909 other corporate insolvencies, comprising 1,309 receiverships, 2,835 administrations and 765 company voluntary arrangements.  In total these represented a decrease of 22.8% on 2009.

Graph 2 shows trends in company liquidations since 1984. 


COMPANY LIQUIDATION AND INDIVIDUAL INSOLVENCY RATES: LONGER-TERM PERSPECTIVE

In the twelve months ending Q4 2010, approximately 1 in 138 active companies (or 0.7% of all active registered companies) went into liquidation, which is a slight decrease from the previous quarter, when this figure stood at 1 in 133.  As Graph 2 shows, the liquidation rate remains low compared to a peak of 2.6% in 1993, and the average of 1.3% seen over the last 25 years.  It should be noted that the number of active companies has changed considerably over this period; there were 2.3 million active registered companies in Q4 2010; this compares with only about 900,000 in the early 1990s and less than 800,000 in 1986.

In the twelve months ending Q4 2010, approximately 1 in 323 people became insolvent.  This is down from 1 in 311 in the previous quarter.  As Graph 3 shows, the individual insolvency rate has displayed a steeply upward path (with some fluctuations) since 2004 and is currently elevated compared to the annual average of 1 in 1800 (0.1%) people seen over the last 25 years.









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