3 Key Takeaways From October 2023’s Monthly Insolvency Statistics

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Understanding the monthly insolvency statistics has always been important for UK businesses, giving company directors and stakeholders a better understanding of the current operating environment and wider context to any challenges or successes they may be experiencing. These reports detail the number of insolvencies, administrations and bankruptcies registered each month, allowing useful comparisons and observations to be made.

The latest monthly insolvency statistics have now been released by the Insolvency Service and, at first glance, make for pretty troubling reading. To help you understand what they mean for you and your business, My Liquidation has summarised the three key takeaways from the October 2023 release alongside guidance on what to do if you are particularly concerned. 

Company Insolvencies Are On The Up

The main headline from the latest monthly insolvency statistics is that the total number of company insolvencies has risen 18% year-on-year. 2,315 company insolvencies were registered in October 2023 compared to 1,954 in October 2022. These overall numbers are higher than the insolvency levels reported pre-pandemic and include numbers of compulsory liquidations and administrations that return close to 2019 figures.

CVL Numbers Have Risen

Alongside high numbers of compulsory liquidations, the main factor contributing to the overall rise in company insolvencies is an increase in creditors voluntary liquidations (CVLs) in October 2023. 1,889 CVLs were registered in total, demonstrating that growing numbers of company directors are deciding that business closure is the most suitable course of action. When faced with insolvency, businesses can opt for a CVL. This method of liquidation alleviates creditor pressure and is typically more favourable for all stakeholders in comparison to waiting for a winding-up petition to potentially be enforced by HMRC.

Be Aware Of Individual Insolvencies

As well as providing details on company insolvencies, the monthly insolvency statistics also summarise the levels of individual insolvencies in any given month. At first glance, these numbers paint a different picture as the total number of individual insolvencies was 6% lower in October 2023 compared to the same month in the previous year. While this drop seems like a positive sign for individuals, it is important to understand how these figures are generated. 

Individual insolvency figures comprise bankruptcies, debt relief orders (DROs) and individual voluntary arrangements (IVAs). The reported decline in individual insolvencies can be attributed to the fact that there was a 22% year-on-year decline in IVAs. However, these numbers have still increased in comparison to last month’s release and sit alongside a 71% year-on-year increase in DROs, indicating that individuals should not be complacent and still act quickly if they are concerned about their own situation. 

What This Means For Your Business

The rising number of company insolvencies will understandably be of concern to most businesses and directors, indicating the continuation of ongoing economic challenges in the UK. Nicky Fisher, President of R3, the UK’s insolvency and restructuring and trade body, explains why businesses are feeling the effects of such challenge so strongly in her commentary on October 2023’s monthly insolvency statistics. She highlights that “businesses are being battered from all sides. Costs have increased, demands for wages are incoming and people are spending less as they look to save ahead of the winter and to make sure they have enough left to cover the basics.”

Fisher continues by stressing that a strong Christmas trading period could help many businesses, but reemphasises that “if the Christmas trading period doesn’t bring a wave of new income, we could see insolvencies continue to rise in the new year.” With new and/or continued economic difficulty a real possibility as we progress into 2024, it is essential that any business concerned about their own position or worried about current levels of insolvency in the UK gets in touch with a licensed insolvency practitioner. 

To increase the chances of a positive outcome for your business, it is always wise to speak to an expert as soon as possible. The team here at My Liquidation has years of experience helping struggling businesses deal with insolvency in the most effective way. Get in touch today to discuss your concerns and options. 

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