Methodology and Quality Document - Individual Insolvencies by Location, Age and Gender, 2021
Updated 31 March 2023
Applies to England and Wales
© Crown copyright 2023
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This publication is available at https://www.gov.uk/government/statistics/individual-insolvencies-by-location-age-and-gender-england-and-wales-2021/methodology-and-quality-document-individual-insolvencies-by-location-age-and-gender-2021
The annual statistics in this publication provide breakdowns of insolvency numbers in England and Wales by type of insolvency, age, gender, region, county, local authority, ward, and parliamentary constituency.
For general notes on individual insolvency statistics in England and Wales please see the quarterly Insolvency Statistics publication, which is the definitive source of the number of new cases each year in England and Wales, and the rate per 10,000 adults. The latest document can be found on the gov.uk website.
1. Methodology
1.1 Data sources for insolvencies
Individual insolvency data was sourced from the Insolvency Service case information system (ISCIS) in January 2022.
The gender of the debtor is collected when they enter an insolvency procedure and is self-reported. The administrative system from which these statistics are derived allows the options ‘Male’, ‘Female’ and ‘Unknown’.
The date of birth of the debtor is collected on entry to an insolvency procedure and is used along with the date the insolvency procedure commenced to determine age for the purposes of these statistics.
Geographical boundary definitions are sourced from the Office for National Statistics and are based on Ordnance Survey data.
Population statistics are sourced from the Office for National Statistics (ONS) publication Population Estimates for UK, England and Wales, Scotland and Northern Ireland. Breakdowns are included by age, gender, local authority, and parliamentary constituency, so they can be used as the denominator when calculating insolvency rates per 10,000 adults. At the time of publication, the ONS mid-year population estimates by location were not available for the latest year, so the mid-year population estimates for 2020 were used for 2021 instead. Numbers for the latest year are therefore marked as provisional and will be revised in the 2022 publication.
More information on the administrative systems used to compile the agency’s statistics can be found in the Statement of Administrative Sources.
1.2 Tabulating numbers of individual insolvencies
Bankruptcy and Debt Relief Order (DRO) data are tabulated by insolvency type and calendar year of order or agreement, along with age, gender and location as defined above under ‘Data Sources’. Individual voluntary arrangements (IVAs) in England & Wales are counted within these statistics once they are registered with the Insolvency Service, and are reported by year of registration date. There is often a time lag between the date on which the IVA is accepted (known as the date of creditor agreement) and date of registration by licensed insolvency practitioners working for firms that specialise in this area. For some IVAs, the year in which they were registered may differ from the date of creditor agreement.
Postcode data are matched against the National Statistics Postcode Lookup, to determine the region, local authority, and parliamentary constituency of each individual. These data are then aggregated to produce counts of insolvencies in each geographical area. The National Statistics Postcode Lookup is derived from data from the Office for National Statistics and Ordnance Survey.
Boundary changes
Two new unitary authorities were created as at April 2021. These were North Northamptonshire (E06000061) and West Northamptonshire (E06000062). Corby, East Northamptonshire, Kettering, Wellingborough, Daventry, Northampton, and South Northamptonshire were all abolished. In this publication, numbers are presented for the new unitary authorities only, however historic numbers for the abolished districts can be found in the 2020 edition of this publication.
Methodology changes
Methodology changes were implemented for this publication to align with the Insolvency Service’s quarterly National Statistics. The same data was used for this publication and the Q4 2021 quarterly statistics. The methodology for removing duplicate cases was also made consistent, and revoked and under enquiry DROs are now included in the numbers presented in this publication. This means that the overall totals for England and Wales for individual insolvencies should match exactly between this publication and all other Insolvency Service Official Statistics that present data as at end of December 2021. The only exception is insolvency rates for 2021, because different population estimates are used. See the ‘Comparability and Coherence’ section below for more details.
2. Revisions
In past publications, only numbers found to be in error were revised. However, in this publication figures from previous years have been revised due to methodological changes and changes to local authority boundaries, as well as to ensure consistency with the Insolvency Service’s quarterly National Statistics. As a result of these revisions, entire tables are marked with [r] markers. The revisions are small and are unlikely to affect the overall trends presented in the time series. At the region level, the largest change for any region in any year was 1%, with typical changes being less than 0.2%.
Population estimates for 2021 were not available as at the time of publication, so the 2020 mid-year population estimates were used to calculate insolvency rates for 2021. Therefore, the insolvency rates for the latest year are marked provisional and will be revised in next year’s edition of this publication based on updated population estimates. The documents for this edition will not be updated, except for the single-year tables on Location, Age and Gender, for which updated tables for insolvency rates (Tables 1b, 2b, 3b and 4b) will be provided at the time of the 2022 publication in March/April 2023.
The impact of using the previous year’s population estimates to calculate insolvency rates is likely to be small. For the majority of local authorities, estimated year on year population changes are less than 1%. Except for local authorities with small population numbers, such as the City of London, the maximum estimated year on year population change in any local authority for any year between 2011 and 2020 was 4%.
3. Quality
This section provides information on the quality of these statistics, to enable users to judge whether the data are of sufficient quality for their intended use.
The section is structured to align with the Quality Assurance Framework of the European Statistical System for statistical outputs.
Relevance: The degree to which the statistical product meets user needs in both coverage and content.
The Insolvency Service has policy responsibility for individual insolvency in England and Wales only; the extent of the coverage of these statistics reflects this.
Individual insolvency figures at national (England and Wales) level are published quarterly by the Insolvency Service as a National Statistics release. The annual statistics in this publication provide breakdowns by region, county, unitary authority, local authority, ward, and parliamentary constituency; and by age and gender to local authority level.
Key users of insolvency statistics include the Insolvency Service itself, which has policy responsibility for insolvency in England & Wales and for the non-devolved areas within Scotland and Northern Ireland; other government departments; parliament; the insolvency profession; debt advice agencies; media organisations; academics; the financial sector; the business community and the general public. Insolvency statistics are typically widely reported in national, regional and specialist media on the day of release.
The insolvency statistics are the most comprehensive record of the number of individual insolvencies in the UK and their location. They include all formal types of insolvency procedure currently available.
The statistical production team welcomes feedback from users of these statistics (current contact details are provided on the front page of the latest release).
Accuracy and Reliability: Accuracy is the proximity between an estimate and the unknown true value. Reliability is the closeness of early estimations to subsequent estimated values.
All formal insolvency procedures entered into by an individual are required by law to be reported to the appropriate body, so Insolvency Service statistics should be a complete record of insolvency in England and Wales.
Checks are in place to identify and remove duplication of cases, to ensure that returns cover all reporting areas, and to check consistency within tables and between related tables.
Accuracy and completeness of geographic data
Individuals have been classified into geographic areas on the basis of the postcode supplied by the individual. As some postcodes supplied are missing or incomplete, or do not match the National Statistics Postcode Lookup, some individuals have not been matched to geographic areas. As shown in Table 1, in 2021 approximately one in every 1,000 cases remained unmatched.
Postcodes are assigned to areas using the centroid of the postcode area. As postcode boundaries are not contiguous with other geographic boundaries, these postcode boundaries could span several geographic boundaries.
It is possible an individual changed place of residence in order to cut costs and attempt to get out of financial difficulty. Where this failed and the individual was declared insolvent, it will be the address at the time of the insolvency which is recorded and used to classify the insolvent’s location, where this can be determined. Where more than one address has been provided and the address at the time of insolvency is not known, the first known postcode listed in our systems is used.
Table 1: Percentage of postcodes that were missing or unmatched
England and Wales, 2011 to 2021
| All | Bankruptcies | DROs | IVAs | |
|---|---|---|---|---|
| 2011 | 0.7% | 0.4% | 0.1% | 1.4% |
| 2012 | 0.5% | 0.4% | 0.1% | 0.8% |
| 2013 | 0.4% | 0.2% | 0.1% | 0.7% |
| 2014 | 0.4% | 0.3% | 0.03% | 0.7% |
| 2015 | 0.6% | 0.3% | 0.1% | 1.1% |
| 2016 | 0.8% | 0.3% | 0.1% | 1.3% |
| 2017 | 0.1% | 0.2% | 0.1% | 0.1% |
| 2018 | 0.1% | 0.2% | 0.1% | 0.1% |
| 2019 | 0.1% | 0.1% | 0.1% | 0.1% |
| 2020 | 0.1% | 0.3% | 0.1% | 0.1% |
| 2021 | 0.1% | 0.2% | 0.1% | 0.1% |
Accuracy and completeness of age and gender data
Some records of individual insolvents have missing, incomplete or implausible data for either or both of date of birth and gender. These have been classified as ‘unknown’ in the relevant tables but included in the regional tables if the postcode matched the National Statistics Postcode Lookup.
Gender is self-reported by the debtor when they enter the debt relief procedure. The administrative system from which these statistics are derived allows the options ‘Male’, ‘Female’ and ‘Unknown’.
Timeliness and Punctuality: Timeliness refers to the elapsed time between publication and the period to which the data refer. Punctuality refers to the time lag between the actual and planned dates of publication.
The key statistics in this publication relate to the rate of individual insolvency per 10,000 adults, which is dependent on population estimates at local authority, county and unitary authority, and region level for the denominator in this calculation. The ONS released Population Estimates for UK, England and Wales, Scotland and Northern Ireland, mid-2020 on 25 June 2021. The next release is due in September 2022.
Previous editions of these statistics were published only after the release of the population estimates for the latest year. However, following discussion with the ONS, along with considering feedback and requests from users, we concluded that the benefits of providing timely information outweighed the small inaccuracies associated with the use of the previous year’s population estimates. Therefore, the population denominators for the latest year are derived from the ONS mid-year estimates from the previous year. The rates for the latest year are marked as provisional and will be revised when the next edition of this publication is released.
The publication schedule for these statistics, and all other Insolvency Service statistics, can be found on the UK National Statistics Publication Hub.
Comparability and Coherence: Comparability is the degree to which data can be compared over time and domain. Coherence is the degree to which data are derived from different sources or methods, but refer to the same topic, are similar.
The numbers presented in this release are consistent with the quarterly National Statistics, except for the rates of insolvency per 10,000 adults in 2021. The reason for this is that at the time of publication, the ONS mid-year population estimates by location were not available for the latest year. The quarterly statistics use ONS population projections for 2021, but these do not include the geographical breakdowns required for this publication, so in this publication the mid-year population estimates for 2020 were used for 2021 instead. The quarterly National Statistics are the definitive source of the insolvency rate per 10,000 adults in England and Wales.
Changes to legislation over time may affect the time series statistics in this release. In particular:
- New monetary eligibility limits for Debt Relief Orders in England and Wales came into effect on 29 June 2021. This included the level of debt at which people can apply for a DRO being increased from £20,000 to £30,000, as well as other changes which can be found in the Glossary. More people are now able to access this form of debt solution as a result of these changes.
- In 2016, there was a change to the process for people making themselves bankrupt, which removed the courts from the process. Since 6 April 2016, applications must be submitted online via the central UK Government website, https://www.gov.uk/, to the adjudicator within the Insolvency Service.
- There was a change in the minimum debt a creditor must be owed to make someone bankrupt, which increased from £750 to £5,000 for petitions presented from 1 October 2015.
- In October 2015, the upper limit for qualifying debt for a DRO was raised from £15,000 to £20,000, and the asset limit was raised from £300 to £1,000.
Accessibility and Clarity: Accessibility is the ease with which users are able to access the data, also reflecting the format in which the data are available and the availability of supporting information. Clarity refers to the quality and sufficiency of metadata, illustrations and accompanying advice.
Insolvency Statistics are available free of charge to the end user on the GOV.UK website. They are released via the Publication Hub and they meet the standards required under the Code of Practice for Official Statistics.
The accompanying data tables are formatted in line with current guidance for producers of official statistics to help improve the usability, accessibility and machine readability of spreadsheets. The Government Statistical Service are continuing to review this guidance and so the presentation of these statistics may change in the future.
Historical insolvency data are also published for the key series, on the National Archives website.
Views on the clarity of the publication are welcomed via the contact details on the cover page of this release.
Any enquiries regarding this document/publication should be sent to us at statistics@insolvency.gov.uk.