LONDON, April 15 (Reuters) - More businesses and individuals across Britain were declared insolvent last month than earlier in 2021 though levels remained mostly below those of a year ago as government support muted the impact of the coronavirus pandemic.
Britain’s economy shrank by almost 10% last year and millions of people have been unable to work due to lockdown restrictions, but state loan guarantees and wage subsidies have kept most companies and households financially afloat for now.
Government figures on Thursday showed 992 companies in England and Wales were declared insolvent in March.
This represents a rise since the start of the year but is still 20% fewer than in March last year at the start of the pandemic, and 37% down on two years ago. Data for Scottish and Northern Irish companies showed a similar picture.
“The economic damage caused by the pandemic is starting to be reflected in levels of insolvency, but government support has postponed rather than prevented the true picture being shown in insolvency levels to date,” said Christina Fitzgerald, vice president of insolvency and restructuring trade body R3.
Personal bankruptcies in England and Wales were also around a third lower in March than a year earlier but have increased since January.
A separate category of debt relief for people who are struggling to pay money they owe, known as individual voluntary arrangements (IVAs), rose sharply in the first quarter of 2021 to 24% above its level in the first quarter of 2020.
The government’s insolvency agency noted the number of IVAs was often volatile due to reporting delays, and the real number of IVAs in the first quarter was probably higher as technical problems at one IVA provider had prevented timely registrations.
(Reporting by David Milliken Editing by William Schomberg)
Source: Reuters