One in 399 adults in UK became insolvent in 2022

One in 399 adults (at a rate of 25.0 per 10,000 adults) entered insolvency the UK in 2022. This is higher than the 23.3 per 10,000 adults who entered insolvency in 2021 but a decrease from the 26.1 per 10,000 adults who entered insolvency in 2019 (before the coronavirus (COVID-19) pandemic).

As per the data by the UK government, the total number of individual insolvencies registered in the UK in 2022 was 118,850, which was higher than the 110,045 registered in 2021, but slightly lower than the 122,150 registered in 2019.

2022 saw the lowest annual number of bankruptcies since 1982, while numbers of DROs were higher than 2021 but remained below pre-pandemic levels. The annual number of IVAs in 2022 increased from the previous record high in 2021. IVAs accounted for 74% of all individual insolvencies.

There were 70,546 registered breathing spaces in 2022, comprised of 69,334 Standard and 1,212 Mental Health breathing space registrations. Average quarterly Breathing Space numbers were 14% higher than in 2021. Since the start of the scheme in 4 May 2021, more than 110,000 breathing spaces have been registered.

Number of individual insolvencies: quarterly summary

After seasonal adjustment (where applicable), there were 29,589 individual insolvencies registered in Q4 2022, 6% higher than the number of individual insolvencies registered in the previous quarter and 7% higher than during the same quarter in the previous year.

Individual voluntary arrangements (IVAs) were the most common individual insolvency procedure (74% of cases), followed by DROs (21% of cases) and bankruptcies (5% of cases).

IVAs

In 2022, IVAs increased by 8% compared to 2021. Numbers of IVAs increased over the past 7 years, reaching a record high in 2022. In 2022 more than twice as many IVAs were registered as in 2015.

After seasonal adjustment, the number of IVAs registered in Q4 2022 was 6% higher than in Q3 2022, and 10% higher than in Q4 2021.

Caution needs to be applied when interpreting the IVA numbers. IVAs are counted within these statistics once they are registered with the Insolvency Service by licensed insolvency practitioners. There can be a time lag between the date on which the IVA is accepted and the date of registration. Changes in volumes of registered IVAs may be in part due to changes in how insolvency practitioner firms operate.

Bankruptcies

The number of bankruptcies in 2022 was 24% lower than 2021 and 60% lower than in 2019. The long term trend shows that numbers of bankruptcies have been declining, reaching the lowest annual number since 1982.

After seasonal adjustment, the number of bankruptcies registered in Q4 2022 decreased by 8% from the previous quarter and by 14% from the same quarter last year. The number of bankruptcies was the lowest since Q4 1982. In Q4 2022, bankruptcies consisted of:

1,308 debtors’ applications, which was 8% lower than Q3 2022 and 16% lower than Q4 2021, 263 creditors’ petitions, which was 12% lower than Q3 2022 and 4% lower than Q4 2021.

Overall in 2022, 82% of bankruptcies resulted from debtor applications. This is lower than the proportion seen during the COVID-19 pandemic (approx. 90%), but is similar to pre-pandemic values of 75-85%. The numbers of debtors’ applications and creditors’ petitions in both Q4 2022 and in 2022 overall were both amongst the lowest seen since 1998 when data on petition type started to be captured.

Annual individual insolvency rates per 10,000 adults

In 2022 one in 399 adults (at a rate of 25.0 per 10,000 adults) entered insolvency in the UK in 2022. This is higher than the 23.3 per 10,000 adults who entered insolvency in 2021, but a decrease from the 26.1 per 10,000 adults who entered insolvency in 2019 (before the coronavirus (COVID-19) pandemic).

The insolvency rate gives an indication of the probability of an individual becoming insolvent in the previous four quarters. As the rates are calculated as a proportion of the total number of adults, they are more comparable over longer time periods than the absolute numbers.

The rates presented for each quarter reflect a four quarter rolling rate per 10,000 adults. Therefore, the Q4 2022 rates, for example, were calculated using data covering the period Q1 2022 to Q4 2022.

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