Accredited official statistics

Methodology and Quality Document - Individual Insolvency Statistics September 2024

Published 18 October 2024

Designation as accredited official statistics

These accredited official statistics were independently reviewed by the Office for Statistics Regulation (OSR) in July 2024. They comply with the standards of trustworthiness, quality and value in the Code of Practice for Statistics and should be labelled ‘accredited official statistics’.

Further details of the OSR’s review of these statistics can be found in their published Compliance Check. You are welcome to contact us directly with any comments about how we meet these standards. Alternatively, you can contact OSR by emailing regulation@statistics.gov.uk or via the OSR website.

1. Data sources and data validation

Individual-level data for England and Wales were sourced from the Insolvency Service Case Information System (ISCIS). Duplicate records were removed and checks made against the data extracted from the system in the previous month.

Aggregate data for Northern Ireland were sourced from the Department for the Economy. Aggregate data for Scotland were sourced from the Accountant in Bankruptcy (AiB), as published in their quarterly statistical series on the AIB website. The Insolvency Service does not conduct any further validation on these aggregate data.

Population estimates for people over the age of 18, as published by the Office for National Statistics (ONS), were used to calculate individual insolvency rates per 10,000 adults. For 2024, the 2021-based population projections were used as more recent population estimates were not yet available.

Breathing space data were sourced from the Breathing Space register. Some automated validation checks are made on the individual breathing space data, such as ensuring that dates are formatted correctly. However, data are extracted from the Breathing Space register in aggregate form to protect the identity of individuals and therefore the Insolvency Service does not conduct any further validation on these aggregate data.

More information on the administrative systems used to compile these insolvency statistics can be found in the Statement of Administrative Sources.

2. Methodology

2.1 Seasonal adjustment of data

Underlying data for these monthly statistics for England and Wales were adjusted using an autoregressive integrated moving average (ARIMA) model where there was evidence of seasonality. This removal of systematic calendar-related variation enables comparisons to be made between months and the underlying trend in insolvency numbers to be determined.

The seasonal adjustment models are reviewed on an annual basis, in accordance with the Insolvency Service Official Statistics Revisions Policy. Based on the outcome of the April 2024 Seasonal Adjustment Review, bankruptcies, DROs and IVAs in England and Wales were all seasonally adjusted. Data for Scotland and Northern Ireland were not adjusted.

Seasonal adjustment in this publication typically results in numbers being adjusted by up to 10%. There are a few cases where the adjustment is larger. For example, bankruptcy numbers tend to be 20-30% lower during December than other months and therefore the process of seasonal adjustment increases the December bankruptcy numbers by approximately this amount to correspond to the underlying trend.

Seasonal adjustment was carried out using X13-ARIMA-SEATS (developed by the US Census Bureau), as implemented in the ‘seasonal’ package in R.

Full details of the 2024 seasonal adjustment review and the models used to adjust these data can be can be found in the April 2024 Seasonal Adjustment Review.

2.2 Calculation of rates

Individual insolvency rates were calculated by dividing the total number of individuals becoming insolvent in the previous twelve months by the mean average number of persons aged 18 and over residing in England and Wales over the corresponding period.

The rates presented for each month reflect a 12-month rolling rate per 10,000 adults in England and Wales. Therefore, the September 2024 rates, for example, were calculated using data covering the period 01 October 2023 to 30 September 2024. The insolvency rate gives an indication of the probability of an individual becoming insolvent in the previous twelve months. As the rates are calculated as a proportion of the total number of adults in England and Wales, they are more comparable over longer time periods than the absolute numbers.

2.3 Tabulating numbers of individual insolvencies

The main series of individual insolvency tables present the overall numbers of individual insolvencies in each month since January 2021, as well as annual totals. Tables 1a and 1b present seasonally adjusted and non-seasonally adjusted tables for England and Wales. The commentary for these statistics refers to the seasonally adjusted figures so that reliable month-to-month comparisons can be made.

Bankruptcy and Debt Relief Order (DRO) data for England and Wales were tabulated by insolvency type and calendar month of order or agreement.

Individual Voluntary Arrangements (IVAs) in England and Wales were counted within these statistics in accordance with the month in which they were registered with the Insolvency Service. Note that 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. Therefore, these data can be volatile. Table 1c shows the numbers of IVAs by month of approval date. However, the number for the latest month is unavailable, as many IVAs approved in that month have not yet been registered with the Insolvency Service at the time these statistics are compiled. Numbers for previous months may also be revised where there is a lag of more than one month between the agreement of the IVA and its registration with the Insolvency Service.

Individual insolvency rates per 10,000 adults for England and Wales are presented in Table 2. Rates are not provided for Scotland and Northern Ireland.

Tables 3a to 5 provide more granular detail on individuals that have become bankrupt.

Numbers of bankruptcies by employment status are presented in Tables 4a and 4b. Table 4b presents the number of consumer bankruptcies broken down into ‘other individuals’ and ‘unknown individuals’. ‘Other individuals’ includes bankruptcies where the employment status is designated in Insolvency Service administrative systems as either ‘non-trading’ or ‘non-surrender’. ‘Unknown individuals’ includes those that are unknown.

Table 4c presents monthly numbers of ‘trader bankruptcies’ by industry in accordance with the 2007 Standard Industrial Classification (SIC). Trader bankruptcies are defined as bankrupts who self-declared themselves as self-employed at time of bankruptcy.

Trader bankruptcy data held by the Insolvency Service includes primarily the 2003 Standard Industrial Classification (SIC). These have been translated to 2007 SIC codes using the correlation tables provided by the Office for National Statistics. These statistics present trader bankruptcy data for England and Wales to the three-digit SIC 2007 level. Statistics are not presented for Scotland and Northern Ireland, because these data are not supplied to the Insolvency Service.

For information on SIC 2007, including its structure and more detailed information on which industries are included, please see the Office for National Statistics website.

Table 5 provides numbers of income payment agreements (IPAs) and orders (IPOs) for bankrupt individuals, based on the month the agreement was signed (for IPAs) or the date the order was made (IPOs).

Aggregate counts of breathing space registrations are provided in Table 6, tabulated by month of registration on the breathing space register.

Numbers of DROs by authorising body, IVAs by case firm and breathing spaces by money advisor group are shown in Tables 7a, 7b and 7c, respectively. For IVAs, numbers reflect the firm recorded for cases as at the time of data extraction. Numbers may be unreliable where IVAs have been transferred between providers, as not all such transfers are reflected on Insolvency Service administrative systems.

Table 8 presents the non-seasonally adjusted numbers for Scotland. The latest available top-level quarterly statistics for Scotland published by the Accountant in Bankruptcy (AiB) were presented within these individual insolvency statistics. Monthly statistics for Scotland are not available. Table 9 presents the non-seasonally adjusted numbers for Northern Ireland.

A monthly time series back to 2000 can be found in the long_run comma-separated values (CSV) on the main publication page.

3. Revisions

These statistics are subject to revisions, as set out in the published Revisions Policy. Revisions tend to be made as a result of data being entered onto administrative systems after the cut-off date for data being extracted to produce the statistics. In addition, seasonally adjusted numbers are revised in subsequent publications, as the ARIMA model used is updated with additional data. Any future revisions from the previous edition of the publication are noted in the Notes column of the relevant tables, except where they result from changes to the seasonal adjustment model.

There are more revisions than usual this month in Table 7b as a result of the Insolvency Service receiving corrected information from insolvency practitioners relating to the case firm of some cases, as well as improvements to our methodology of aggregating firms listed in the data under slightly different names. The largest change is that approximately 9,000 cases, registered in 2021 or earlier, are now listed under Oakfield instead of Creditfix.

4. Quality

This section provides information on the quality of these monthly individual insolvency 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

These statistics present individual insolvencies for England & Wales, Scotland and Northern Ireland and are the most comprehensive record of the number of individual insolvencies in the United Kingdom.

The content and format of this publication were updated in April 2024 in response to feedback provided in a user consultation in 2023.

Key users of insolvency statistics include the Insolvency Service itself, which has policy responsibility for insolvency in England and 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. Key users of the breathing space statistics include HM Treasury, which has policy responsibility for the scheme, as well as debt advice agencies, media organisations and the general public.

The statistical production team welcomes feedback from users of the Insolvency Statistics and can be emailed at statistics@insolvency.gov.uk.

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 a company, a partnership or 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 the United Kingdom.

Numbers of insolvency cases are typically based on the date they were registered onto the relevant administrative recording system, and so it should be noted when making comparisons of trends over time, that trends can be influenced by late reporting.

The impact of delayed reporting is particularly an issue for IVAs. IVAs are counted within the statistics once they are registered with the Insolvency Service and are reported by month of registration date. There can be 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. This time lag can lead to volatility in the data from one month to the next and create difficulty in constituting reliable short-term trends, since changes over time may be partly a result of IVA provider activity. The IVA data are seasonally adjusted but trends over time may still not be reliable due to volatility in the data.

Table 1c shows the numbers of IVAs by month of approval date. However, the number for the latest month is unavailable, as many IVAs approved in that month have not yet been registered with the Insolvency Service at the time these statistics are compiled. Numbers for previous months may also be revised where there is a lag of more than one month between the agreement of the IVA and its registration with the Insolvency Service.

Some 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.

Note that data are extracted from live administrative systems and therefore subject to routine revisions as systems are updated.

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.

Individual insolvency data were extracted five working days after end of the month. Typically, these statistics are scheduled to be released two to three weeks after the end of the month to which they refer. This is to allow time to extract and compile the statistics.

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 sum of the non-seasonally adjusted monthly numbers match closely to previously published numbers in the discontinued quarterly Indivdual Insolvency Statistics back to 2011. Prior to 2011 there are larger differences, but these are typically less than 1% for total bankruptcies, DROs and IVAs. These small differences likely result from different data sources being used to calculate the historical back series compared to those used when the quarterly numbers for 2000 to 2011 were originally produced.

For seasonally adjusted numbers, there are larger differences compared to previously published quarterly numbers. This is because a new monthly seasonal adjustment model has been produced. However, the quarterly sums of monthly seasonally adjusted numbers show similar differences in the magnitude and direction of seasonal adjustment to the previously published quarterly numbers.

Insolvency data can also be found in The Gazette (formally the combination of three publications: The London Gazette, The Belfast Gazette and The Edinburgh Gazette), which is an official journal of record consisting of statutory notices, including bankruptcies. The timings of the publication of Gazette notices and the start of the bankruptcy may differ and therefore the numbers of bankruptcies in a specified time period may not align.

Individual insolvencies in Scotland are compiled and published separately by the Accountant in Bankruptcy (AiB). The Insolvency Service incorporates individual insolvencies in Scotland into these individual statistics for completeness. Therefore, these statistics should align.

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 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.

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 email: statistics@insolvency.gov.uk.