4 Key Takeaways From November 2022’s Insolvency Statistics
When the pandemic began, The Insolvency Service started to release monthly insolvency statistics in order to assess how individuals and companies were being impacted. Since then, the monthly statistics for UK insolvencies have continued to be released. These provide up to date information on the number of companies and individuals who have entered formal insolvency procedures. The most recent statistics for November 2022 have been released on 14 December 2022. Let’s take a closer look at the main points to take from the latest insolvency statistics.
Corporate Insolvencies Have Increased Since October 2022
In October 2022, there were 1,948 registered company insolvencies. In November 2022, this figure increased to 2,029. This was partly led by an increase in the number of Creditors Voluntary Liquidations (CVLs), of which there were 1,595, 5% higher than in November 2021 and 50% higher than November 2019. An increase in compulsory liquidations has also had a big role to play.
Compulsory Liquidations Have Increased From Historical Lows During Covid
The increase in corporate insolvencies shown in the latest insolvency statistics have also been driven by a rise in the number of compulsory liquidations. There were 290 compulsory liquidations in November 2022, compared to 242 from the month previously. The 290 compulsory liquidations recorded for November of this year was 5 times the amount for November 2021, and 7% higher than November 2019. An increase in the number of winding up petitions presented by HMRC has played a partial role in driving these insolvency statistics.
Corporate Insolvency Statistics Are Higher Than Pre-Pandemic Levels
With the number of compulsory liquidations and CVLs on the rise, it’s not surprising to see that the overall number of UK insolvencies for November 2022 is higher than pre-pandemic levels. The number of registered insolvencies for November 2022 (2,029) was 35% higher than the number registered three years previously. In November 2019, there were 1,505 registered insolvencies.
Company Voluntary Arrangements (CVAs) & Administrations Remained Lower Than Pre-Pandemic
The monthly insolvency statistics for November of this year show that there were 10 CVAs. This is the same as November 2021,but 52% lower than November 2019. There were 134 administrations, which is 44% higher than November 2021, but 11% lower than November 2019.
Commenting on the increase in UK insolvencies, Christina Fitzgerald, the President of R3, the insolvency and restructuring trade body, sums up the current economic climate aptly. Fitzgerald highlights how “an increasing number of businesses are buckling under the strain of more than two and half years of economic turmoil. Companies have been battered by the pandemic, rising costs, reduced spending and increasing inflation, and a growing number are now turning to an insolvency process to resolve their financial distress”. How businesses will fare following the Christmas trading period is yet to be seen.
What To Do If Your Business Is Struggling
If you’re concerned that your company is facing insolvency then it’s important to act quickly. The most recent monthly insolvency statistics reflect how challenging the current economic climate is for businesses, and so if you’re struggling you’re certainly not alone. It’s essential to contact a licensed insolvency practitioner at the first signs of trouble. They will be able to advise you on the next steps your company should take, whether that’s voluntary liquidation via a CVL or MVL, or the potential for recovery/restructuring. It’s important to act at the first signs of trouble rather than letting problems escalate and potentially being forced into compulsory liquidation.
To discuss your business’ requirements, please don’t hesitate to get in touch with our experienced team of insolvency practitioners at My Liquidation.
