News | Published February 24 2020

Government’s Insolvency Service pays out highest amount for seven years

Following a number of high-profile failures, the government’s Insolvency Service has paid out the highest level of redundancy payments for seven years.

Across 2019, the Insolvency Service paid out £364 million, 16 per cent higher than in 2018.

Of this £364 million, £223 million covered redundancy payments, with £64 million allocated for payments to staff who were not given a notice period. The rest of the bill covered unpaid holiday and outstanding payments for wages.

The high redundancy bill was driven by a historically poor year for the retail sector. 

With high-profile companies, such as Mothercare and Thomas Cook, folding, a higher than average number of staff were made redundant.

According to the Centre for Retail Research, 16,000 stores closed last year, leading to the loss of 143,000 jobs.

If the Insolvency Service becomes involved, tax payers initially cover the cost of redundancy and insolvency payments. The money itself comes from the National Insurance Fund, supported by the Insolvency Service.

This is only designed to be temporary however, with attempts made to recover as much as possible from the company’s assets, although this can often be a long process.

Related Stories

Authored by

The Parliamentary Review

February 24 2020

Featured Organisations

Integrity Music UK

First established 50 years ago, Integrity Music is one of the world’s leading song publishers in the area of Christian and gospel music. For many peop... Read more

Frontrow Music

Dave Fidler is an accomplished British singer-songwriter, who has toured the world as a professional musician. When he’s not recording or touring, he ... Read more

Saffrons Park Nursery

Founded in 2012, Saffrons Park Nursery is a full daycare setting based in Eastbourne. They are proud of their inclusivity and welcome all children fro... Read more

Latest News

Government reform programme launched