News

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

@theparlreview
February 24 2020

Featured Organisations

Rendall & Rittner

Rendall and Rittner was first established by two dissatisfied leaseholders in 1990. Determined to improve the experience of residents in their own blo... Read more

Dyebrick

Dyebrick manufacture and supply brick tinting products to the consumer DIY market. Their products are manufactured in the UK and shipped worldwide fro... Read more

Willson Grange

Willson Grange is a wealth management company based on the Wirral, Merseyside. Founded in 2000, the company is preparing for a move to new offices on ... Read more

Latest News