The latest figures from the Insolvency Service have indicated that personal insolvency numbers across England & Wales fell by 14% in May 2021. Personal insolvencies numbers fell to 8,482 when compared to April’s figure of 9,864, and were 38.7% lower than May 2020’s figure of 13,838.
The figures show that there were 1,525 DROs and 718 bankruptcies. The number of DROs in May 2021 was similar to in May 2020 and 33% lower than in May 2019.
The bankruptcies were made up of 647 debtor applications and 71 creditor petitions.
For individuals, 718 bankruptcies and 1,525 Debt Relief Orders were registered. The number of Bankruptcies was similar to May 2020 and 50% lower than during May 2019. DRO numbers were similar to May 2020, but 33% lower than in May 2019 (pre-pandemic).
There were, on average, 7,393 IVAs registered per month in the three-month period ending May 2021, which is similar to both the three-month periods ending May 2020 and May 2019.
Bankruptcies were 3% lower than in May 2020 driven by a drop in debtor applications (6% lower), but creditor petitions were 39% higher. It should be noted that creditor petitions were particularly low in May 2020 as this was during the first UK lockdown. Compared to May 2019, total bankruptcies were 50% lower; debtor applications were 44% lower and creditor petitions were 76% lower.
The furlough scheme has undoubtedly saved millions of jobs. Unfortunately, all good things must come to an end.
Chancellor Rishi Sunak is expected to start winding down the scheme at the end of this month despite the expected delay to ending lockdown in England. As part of the Budget earlier this year, the Chancellor announced he would stop covering 80% of the salaries of those not at work.
The most recent figures showed there were 3.4 million jobs on furlough at the end of April, which was 900,000 lower than the month before. Since the start of the scheme last March, a total of 11.5 million jobs have been supported by furlough at some point at a cost of £64 billion.
From July 1, the Government’s share will fall to 70% with employers contributing 10%, as part of a staged withdrawal of the scheme due to finish completely at the end of September.
As the furlough scheme starts to wind down over the next few months it is expected more and more people will access the Debt Respite Scheme, which gives people in debt breathing space free from creditor pressure in which to seek help.
The advice from debt advisers is clear. Seek advice as early as possible.