Methodology and Quality Document - Individual Insolvencies by Location, Age and Gender, 2020
Updated 16 November 2021
Applies to England and Wales
© Crown copyright 2021
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/statistics/individual-insolvencies-by-location-age-and-gender-england-and-wales-2020/methodology-and-quality-document-individual-insolvencies-by-location-age-and-gender-2020
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.
The annual statistics in this publication provide breakdowns by region and all administrative areas below region, referred to as ‘local authorities’, as well as parliamentary constituencies.
1. Data Sources
Details of individual insolvencies are sourced from administrative records held by the Insolvency Service. Extracts from these records, including postcode, date of birth, date of insolvency, and gender, are taken to derive the breakdowns used in this publication.
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.
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 and local authority, so they can be used as the denominator when calculating insolvency rates per 10,000 adults.
2. Methodology
2.1 Data sources for insolvencies
Individual insolvency data for England & Wales were extracted from the Insolvency Service case information system (ISCIS) in July 2021.
More information on the administrative systems used to compile the agency’s statistics can be found in the Statement of Administrative Sources.
2.2 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 they 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.
Boundary changes
In 2020, the existing Buckinghamshire County Council, along with its districts of Aylesbury Vale, Chiltern, South Bucks, and Wycombe, was replaced by a single unitary authority known as Buckinghamshire Council (E06000060). Due to the correspondence between the old and new boundaries, it was possible to derive historical estimates for the new geographies without attempting to rematch old postcodes on the new basis. These figures covering the period 2000 to 2019 have been included in the time series tables alongside the 2020 data. Older editions of this publication remain unrevised.
Boundary changes for 2021, including the abolition of Northamptonshire county and the creation of North Northamptonshire and West Northamptonshire have not been included in this release. These changes will be included in the 2021 release to be published in 2022.
3. Revisions
In accordance with the current published Revisions Policy, only numbers found to be in error are revised. However, the revisions policy for this publication is currently under review. In particular, the planned improvement to timeliness as described in the Quality section below will require release in advance of the ONS mid-year population estimates for the year of publication becoming available. Therefore, from the 2021 statistics (to be published in 2022), insolvency rates for the latest year will be marked provisional and later revised based on updated population estimates. Any future revisions will be marked with an ‘[r]’ in the relevant tables.
During the production of the parliamentary constituency tables, an error was discovered affecting numbers in the tables by location, age and gender. Numbers for Dorset between 2011 and 2018 had been incorrectly calculated following boundary changes. In addition, numbers of bankruptcies, and therefore total individual insolvencies, with unknown location were miscalculated between 2011 and 2018. As a result of these errors, the numbers (and rates) for England and Wales, for every type of insolvency except bankruptcies, were incorrect. These errors have now been fixed in the accompanying tables and commentary. The impact of these changes on numbers of total insolvencies in England and Wales is minimal, changing by between 136 (0.15%) and 219 (0.19%) cases per year. However, the numbers in the local authority of Dorset have been revised upwards by approximately 35% in each of the affected years.
4. 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, and parliamentary constituency; and by age and gender at region-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 2020 less than one in every 2,000 cases remain 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 missing or unmatched postcodes
England and Wales, 2011 to 2020
| All | Bankruptcies | DROs | IVAs | |
|---|---|---|---|---|
| 2011 | 0.8% | 1.1% | 0.2% | 0.9% |
| 2012 | 0.6% | 0.9% | 0.1% | 0.8% |
| 2013 | 0.4% | 0.4% | 0.3% | 0.5% |
| 2014 | 0.4% | 0.8% | 0.1% | 0.5% |
| 2015 | 0.2% | 0.5% | 0.1% | 0.1% |
| 2016 | 0.9% | 0.8% | 0.2% | 1.3% |
| 2017 | 0.2% | 0.7% | 0.2% | 0.1% |
| 2018 | 0.4% | 1.6% | 0.3% | 0.1% |
| 2019 | 0.1% | 0.1% | 0.1% | 0.1% |
| 2020 | 0.04% | 0.1% | 0.02% | 0.04% |
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.
The ONS population estimates by parliamentary constituency were released on 16 September 2021. Due to the proximity between the release of these population estimates and the release of this publication, the Individual insolvencies by Parliamentary constituency tables and related sections of commentary were not published until 16 November 2021.
Following discussion with the ONS, along with considering feedback and requests from users, from 2022 it is planned that these insolvency statistics will become more timely and be published in March or April each year. The population denominators will be based on the ONS mid-year estimates from the previous year. The rates for the latest year will be marked as provisional and subsequently revised when the relevant population estimates are available.
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 may not be consistent with the quarterly National Statistics as they have been extracted from a live database at a different point in time and with small methodological differences. The quarterly National Statistics are the definitive source of the number of new cases each year in England and Wales, and the rate per 10,000 adults.
Changes to legislation may affect the time series statistics in this release. In particular:
- 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.