Official Statistics

Commentary - Individual Voluntary Arrangements Outcomes and Providers 2022

Published 28 February 2023

Applies to England and Wales

Released

28 February 2023

Next release

February/March 2024

Media enquiries

Jason Raj

+44 (0)33 3032 9366

Statistical enquiries

Stacey Witchell (author)

[email protected]

David Webster (responsible statistician)

1. Main Messages

• In 2022, 87,967 IVAs were registered in England and Wales. This was the highest annual number in the time series going back to 1990, continuing an increasing trend in IVA numbers, as shown in Figure 1. Four firms accounted for more than half of new IVAs registered in 2022.

• In England and Wales, one in 18 Individual Voluntary Arrangements (IVAs) (5.5%) registered with the Insolvency Service in 2021 terminated within one year of being approved. This was lower than the one-year termination rates in 2015-2019, but higher than the record low one-year termination rate in 2020, which coincided with the revised IVA protocol in response to the COVID-19 pandemic. Two- and three-year IVA termination rates of 10.3% and 17.5% (for IVAs registered in 2020 and 2019 respectively) were lower compared to IVAs registered in the preceding years.

• Termination rates over the lifetime of an IVA increased from approximately one in four (25%) for IVAs registered between 2012 and 2014 to one in three (33%) for IVAs registered in 2016 and 2017. Many IVAs registered in 2018 or later remained ongoing as at 31 December 2022, so a definitive trend cannot yet be established, but there are preliminary indications of a decline in lifetime termination rates.

Figure 1: Annual IVA numbers have increased over the past 20 years, reaching a record high in 2022

England and Wales, 2000 to 2022

Source: Insolvency Service

2. Things you need to know about this release

This statistical release shows the outcome status of Individual Voluntary Arrangements (IVAs) registered between 1990 and 2022 in England and Wales, and a breakdown of the number of IVAs registered by provider from 2019 to 2022. IVAs in Northern Ireland and Protected Trust Deeds in Scotland are not included in this release. The Accountant in Bankruptcy publishes individual insolvency statistics for Scotland. The Insolvency Service also publishes monthly and quarterly individual and company insolvency statistics for the United Kingdom.

An IVA is a legally-binding agreement for a debtor to repay creditors some or all of what they are owed over a period of time (usually five years). IVAs in this publication are classified as ‘ongoing’, ‘completed’ or ‘terminated’. Completed means that the IVA has ended, with the debtor having fulfilled their obligations under the agreement. In this case, the debtor is no longer required to repay any amounts for the debts covered by the agreement. Terminated means that the agreement has ended because the debtor has failed to keep to the terms of the arrangement. In this case, the debtor remains liable for the outstanding debts. Further information can be found in the Glossary.

These statistics are derived from administrative records held by the Insolvency Service, an executive agency of the Department for Business and Trade. All IVAs are required to be registered with the Insolvency Service. IVAs in this report are broken down by the year in which they were registered. Most IVAs are registered within 14 days of the date the IVA is approved by creditors.

IVA termination rates are calculated as the number of IVAs registered in a given year that terminated by 31 December 2022, divided by the total number of IVAs registered in that year. For recent registration years, a higher proportion of IVAs remain ongoing, so the termination rates for these years will increase in the future.

3. Individual voluntary arrangements as a proportion of total individual insolvencies

As shown in Figure 2, the number of new IVAs registered each year increased from approximately 50,000 between 2012 and 2016 to more than 75,000 in each of the past four years. The 87,967 IVAs registered in 2022 was the highest recorded annual number. IVAs accounted for nearly three-quarters (74%) of all individual insolvencies, compared to 64% in 2019 and less than 50% before 2014. For more information on individual insolvencies, see the quarterly Individual Insolvency Statistics.

In 2020 and 2021, the increase in IVAs as a proportion of individual insolvencies was predominantly driven by the reduction in the number of bankruptcies and debt relief orders rather than an increase in IVAs. The reduction in overall numbers of individual insolvencies in 2020 and 2021 is likely to have been partly driven by Government measures put in place in response to the coronavirus (COVID-19) pandemic. However, in 2022 total individual insolvency numbers increased to close to the 2019 pre-pandemic peak, driven mostly by the increase in IVAs.

Figure 2: Over the past ten years, the number of IVAs has increased, while numbers of other individual insolvency types have stayed constant or decreased.

England and Wales, 2012 to 2022

Source: Insolvency Service

More information about individual insolvencies, including longer-term trends, can be found in the quarterly Individual Insolvency Statistics.

4. Termination of individual voluntary arrangements

IVAs are terminated when the debtor fails to keep to the terms of the arrangement. As shown in Figure 3, the percentage of IVAs that terminate, as measured by the number of IVAs registered in a given year that terminated divided by the total number of IVAs registered in that year, has historically ranged from approximately 25% to 40%. The termination rate peaked at 42% for IVAs registered in 2007, before declining to 25% for IVAs registered in 2012 and 2013. The introduction of the IVA Protocol in 2008 is likely to have reduced IVA termination rates by introducing more flexibility to account for debtors’ individual circumstances.

IVA termination rates were higher for IVAs registered between 2015 and 2017 than the historically low levels in the preceding years. The rate of 33% for IVAs registered in 2016 was the highest since 2009. As 19% of IVAs in 2016 and 43% of IVAs in 2017 remained ongoing as at 31 December 2022, termination rates for these years are likely to increase slightly. While most IVAs that have lasted five or more years are successfully completed, some are likely to be terminated. Historically, lifetime termination rates have typically been approximately 1-3 percentage points higher than the rate after five years. For example, for IVAs registered in 2012, 21.6% terminated within five years, with an additional 2.7% terminating after five years, for a total termination rate of 24.3%.

Many IVAs registered in 2018 or later remain ongoing, so a definitive trend cannot yet be established, but there are preliminary indications of a decline in lifetime termination rates. As at 31 December 2022, 28% of IVAs registered in 2018 and 20% of IVAs registered in 2019 had terminated. The equivalent numbers as at 31 December 2021 were 31% for 2017 and 26% for 2018.

Figure 3: IVA termination rates were higher for IVAs registered between 2015 and 2017 than in the preceding years.

England and Wales, 2000 to 2022

Source: Insolvency Service

Bars to the right of the dashed line are faded, because more than 10% of IVAs in these years are still ongoing and the termination rates for these years are likely to increase. The proportion of ongoing IVAs in these years is shown in Table 1 below. An indication of trends for more recent years can be found in the one-, two- and three-year IVA termination rates below.

Table 1: Because IVAs typically last at least 5 years, the majority of IVAs registered between 2018 and 2022 remain ongoing.

England and Wales, 2014 to 2022

Year	Total	Completed (no.)	Completed (%)	Terminated (no.)	Terminated (%)	Ongoing (no.)	Ongoing (%)
2014	51,117	36,652	72	13,301	26	1,164	2
2015	40,005	25,769	64	11,548	29	2,688	7
2016	49,263	23,625	48	16,460	33	9,178	19
2017	59,092	14,688	25	19,199	32	25,205	43
2018	70,683	6,546	9	19,883	28	44,254	63
2019	77,940	4,464	6	15,353	20	58,123	75
2020	78,441	2,456	3	10,663	14	65,322	83
2021	81,189	1,035	1	8,724	11	71,430	88
2022	87,967	154	0	2,313	3	85,500	97

5. Percentage of IVAs terminating within one to four years of registration

Figure 4 shows the proportion of IVAs that terminated within one, two, three and four years of approval. Only complete years as at 31 December 2022 are shown. For example, for IVAs registered in 2020, only two full years have passed, so three- and four-year registration rates can not be shown for this year.

The most common annual period for an IVA to fail is between one and two years after approval. However, for IVAs registered between 2012 and 2015, over half of all terminations occurred more than two years after they were approved. This does not appear to be the case for IVAs registered between 2016 and 2018, for which earlier terminations were more common than in previous years.

The one-year termination rate for IVAs registered in 2021 was 5.5%. This is higher than the one-year termination rate in 2020 (3.9%), which was the lowest termination rate recorded in the time series back to 1990, but less than the 8% termination rate for IVAs registered in 2016, 2017 and 2018. The two-year termination rate of 10.3% for IVAs registered in 2020 was the lowest in the time series back to 1990.

This reduction in early terminations in 2020 and 2021 coincided with the
temporary guidance for the IVA protocol effective between 20 April 2020 and 31 December 2021 in response to the coronavirus (COVID-19) pandemic. The initial version of the guidance allowed individuals with existing IVAs to reduce payments by up to 25% and take a payment holiday of up to three months. Revised guidance in September 2020 increased this to up to a 50% reduction in payments and up to a six-month payment holiday. With the introduction of a revised IVA protocol effective from 1 August 2021, the provisions in the temporary COVID-19 guidance were phased out for new IVAs and came to an end for all IVAs on 31 December 2021.

The three-year termination rate for IVAs registered in 2019 was 17.5%. The termination rate for IVAs registered in 2019 was the lowest since 2014, consistent with the decline in IVA terminations during the COVID-19 pandemic discussed above.

Figure 4: One and two-year termination rates for IVAs registered in 2021 and 2020 were lower than in recent preceding years, but were similar to the rates for IVAs registered between 2012 and 2014.

England and Wales, 2012 to 2022

Source: Insolvency Service

More detailed information, including cumulative termination rates within three months to two years after approval, can be found in Table 2 of the accompanying tables.

6. New individual voluntary arrangement registrations by firm

Table 2 shows a list of IVA firms in descending order of the volumes of IVAs registered in 2022. The top four companies accounted for more than 50% of IVAs registered. With the exception of Anchorage Chambers Limited, these companies were also the top four last year, although the order has changed. Note that numbers of IVAs by firm reflect the Insolvency Service administrative system as at the date of data extraction in February 2023. For example, numbers for Anchorage Chambers Limited include IVAs initially registered by The IVA Advisor, which were transferred to Anchorage Chambers Limited in late 2022.

The top 14 companies accounted for more than 90% of registered IVAs. This is less than in 2021, when 16 companies accounted for more than 90% of IVAs.

Table 2: Four firms accounted for more than 50% of registered IVAs in 2022

Insolvency practitioner firm	New registrations	Percentage of total
Total	87,967	100.0%
Creditfix	21,373	24.3%
Financial Support Systems	8,599	9.8%
Anchorage Chambers Limited	8,329	9.5%
The Insolvency Group Ltd	8,202	9.3%
Hanover Insolvency	6,001	6.8%
Quality Insolvency Services Ltd	5,760	6.5%
Debt Movement UK Ltd	4,377	5.0%
Payplan Partnership Limited	3,958	4.5%
Bennett Jones	3,302	3.8%
My Debt Plan	3,033	3.4%
McCambridge Duffy LLP	2,294	2.6%
AFA Insolvency	1,691	1.9%
Abbotts Insolvency Limited	1,588	1.8%
Forest King	1,549	1.8%
All Other Firms	7,911	9.0%

Breakdowns for 2019 to 2022 are available in Table 3 of the accompanying data tables.

Some cleaning of the data has been carried out to merge multiple names associated with the same provider. For example, IVAs assigned to ‘Payplan Bespoke Solutions’ and ‘Payplan Partnership Limited’ are both included under ‘Payplan Partnership Limited’.

7. Data and Methodology

7.1 Data Sources

Data used for this report are based on information entered by insolvency practitioners and then uploaded to the Insolvency Service systems. More information on the administrative systems used to compile insolvency statistics can be found in the Statement of Administrative Sources.

7.2 Coverage

Statistics are presented for England and Wales only due to differences in legislation and policy. IVAs in Northern Ireland and Protected Trust Deeds in Scotland are not included in this release. The Accountant in Bankruptcy publishes individual insolvency statistics for Scotland. The Insolvency Service also publishes monthly and quarterly individual and company insolvency statistics for the United Kingdom.

7.3 Methodology and data quality

More detailed methodology and quality information has been published alongside this commentary in the accompanying Methodology and Quality document.

The main quality and coverage issues to note are:

• IVAs in England and Wales are counted within the Insolvency Service official statistics releases once they are registered with the Insolvency Service. However, there is often a time lag between the date on which the IVA is accepted and date of registration by licensed insolvency practitioners. If this time lag varied substantially between years, it is possible that the number of IVAs registered in a year would not accurately reflect the number of IVAs actually started within that year. However, current monitoring suggests that the time lag is fairly stable, with most IVAs registered within 14 days of the approval date.

• The same dataset is used for this publication as for the monthly Insolvency Statistics. Therefore, the total number of IVAs registered in each year in this report should align with this publication.

• Data used for this report are based on information entered by insolvency practitioners and then uploaded to the Insolvency Service systems. While some validation checks are undertaken when the information is uploaded, not all errors can be detected. For example, 118 terminated IVAs (0.07% of the total number since 2012) are shown as having a negative duration. These are included in the ‘unknown’ category in Table 2. It is unlikely that data entry errors are common enough to substantially change the conclusions of this report.

• The duration of an IVA is measured as the length of time from the date of approval of creditors to the date it terminated. For consistency with the other tables and the quarterly insolvency statistics, the registration date is still used to assign an IVA to a particular year.

• Revoked and suspended IVAs are included in the terminated category. However, the number of revoked and suspended IVAs is small (less than 0.01% of the total).

• The numbers of IVAs by firm reflect the firm in the Insolvency Service administrative system as at the date of data extraction. Note that there was a transfer of IVAs from The IVA Advisor to Anchorage Chambers Limited in October 2022.

7.4 Revisions

These statistics are subject to scheduled revisions, as set out in the published Revisions Policy. Revisions typically tend to be made as a result of data being entered or changed on administrative systems after the previous publication cut-off date for data being extracted to produce the statistics. Revisions can also be caused by changes in methodology as described above. Such revisions tend to be small in the context of overall totals; nonetheless any figures in this release that have been revised since the previous edition have been highlighted with an [r] in the relevant tables.

8. Glossary

8.1 Key Terms used within this statistical bulletin

Term	Definition
Bankruptcy	A form of debt relief available for anyone who is unable to pay their debts. Assets owned will vest in a trustee in bankruptcy, who will sell them and distribute the proceeds to creditors. Discharge from debts usually takes place 12 months after the bankruptcy order is granted. Bankruptcies result from either Debtor application – where the individual is unable to pay their debts, and applies online to make themselves bankrupt, or Creditor petition – if a creditor is owed £5,000 or more, they can apply to the court to make an individual bankrupt. These statistics relate to petitions where a court order was made as a result, although not all petitions to court result in a bankruptcy order.
Debt Relief Order (DRO)	A form of debt relief available to those who have a low income, low assets and debt no more than a specified value. There is no distribution to creditors, and discharge from debts takes place 12 months after the DRO is granted. DROs were introduced in April 2009. A change in eligibility criteria was introduced from 29th June 2021 in which the upper limit of debt increased from £20,000 to £30,000. In addition, the threshold on the value of assets that a debtor can hold and be eligible to enter into a DRO increased from £1,000 to £2,000; the value of a single motor vehicle that can be disregarded from the total value of assets increased from £1,000 to £2,000; and the level of surplus income received by the debtor before payments should be made to creditors increased from £50 to £75 per month.
Individual Voluntary Arrangement (IVA)	A voluntary means of repaying creditors some or all of what they are owed. Once approved by 75% or more of creditors, the arrangement is binding on all. IVAs are supervised by licensed Insolvency Practitioners.
IVA: Completion	Where the supervisor has issued a certificate (“the completion certificate”) stating that the debtor has complied with their obligations under the arrangement.
IVA: Ongoing	Where the IVA has commenced and remains in progress.
IVA: Termination	Where the supervisor has issued a certificate (“Certificate of Termination”) ending the arrangement because of the debtor’s failure to keep to the terms of the arrangement. Reasons for termination include, for example, missing payments or falling into arrears, change of circumstances where reduced payments are not agreed, and the discovery of higher debts not included on the initial application.
IVA Protocol	A voluntary agreement providing an agreed standard framework for dealing with consumer IVAs. Where a protocol IVA is proposed and agreed, insolvency practitioners and creditors agree to follow the processes and agreed documentation.