According to the latest available figures from The Insolvency Service for quarter 3 2015 company and individual insolvencies have generally declined and some areas have seen the lowest number of insolvencies for many years.
In this period there were 3539 Company insolvencies – 4.4 % lower than the previous quarter and 10.2 % lower on the same period last year. The estimated liquidation rate in the 12 months ended Q3 2015 was 0.46 % of active companies which is the lowest level since comparable records began in 1984.
In Q3 2015 there were 19,683 individuals entering an insolvency process – 2.8 % higher than the previous quarter but a decrease of 18.5 % compared to the same period the previous year. In the 12 months ending Q3 2015 1 in 550 (0.18 %) of the adult population became insolvent which is the lowest rate since 2005.
This is encouraging news for the economy but what of the so called “Zombie businesses”. According to the insolvency trade body R3, these businesses – ie those that are only paying the interest on their debts – has fallen dramatically from 154,000 to 69,000 according to their research.
Although the figures for formal insolvencies have decreased the profession makes a significant contribution to the economy for example it is estimated that some £4bn is returned to creditors each year. In addition, Insolvency Practitioners (IP’s) are increasingly involved in advisory work with businesses and individuals and with solvent liquidations.
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