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What changed for Insolvency in 2019?

The insolvency service have recently released updated figures for personal and corporate insolvency rates for 2019. 

So, what changed in 2019?

Well, all in all, if you’ve been following the news over the last 12 months, it’s best described as “expected”.


Corporate Insolvency

Following a turbulent year for business, particularly on the high street, it won’t come as a surprise that 2019 saw the highest company insolvency levels since 2013. Figures show that this has been driven largely by a spike in CVLs (creditors’ voluntary liquidations), which ended the year at their highest annual rates since 2009.

This being said, there were signs of settling, with a decrease in rates of 1.8% in Q4 2019, compared to Q3 2018, across all types of insolvencies. This decrease followed consecutive increases between Q4 2018 to Q3 2019, beginning the decline. 

Nonetheless, total company insolvencies remain 8.1% higher than the same period last year.

Insolvency chart 1

Who was the hardest hit?

The construction industry was the hardest hit from the larger industry groupings, with figures showing a 2.2% (69 cases) increase on the same period at the end of Q3 2018. This is somewhat unsurprising, following Brexit uncertainty, which led to reports in September of the biggest drop in new work in the industry for a decade.

In brighter news, the information and communications sector saw the largest reduction in insolvencies, (73 fewer) down 7.5% on the same point last year.

Personal Insolvency

The Personal Insolvency rates also followed the trend of their corporate counterparts this year, reaching record levels – the highest since 2009. The level of personal insolvency cases reported soared to 122,181 up from 115,319 in 2018. 

However, despite this increase, rates have stabilised compared with 2018, which saw a significant jump in the final quarter of the year. Despite the maintained increase in all quarters of 2019, each quarter saw a slight drop as the year progressed.

Insolvency chart 2

A spike in IVAs, reaching their highest levels on record, can be held responsible for the year’s increase. Similarly to overall rates, the most significant spike was in Q4 2018, with elevated levels remaining through the year, gradually dropping over the period.

Insolvency chart 3

Yet, the increasing levels don’t show any signs of turning around. Euler Hermes are projecting a 3% increase in insolvency rates by the end of the year, so there are no signs pointing to insolvency firms slowing down just yet!

Remember, if you feel affected, The Insolvency Service provides guidance and advice.



Claire Jones is the Principal Resourcing Consultant in the Accountancy Division at Harvey John.

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