Are Insolvencies On The Rise? Understanding The Latest UK Insolvency Statistics

With the cost of living crisis showing little sign of letting up and notable UK businesses like Wilko disappearing from the high street, many company owners and stakeholders are growing more interested in the question ‘are insolvencies on the rise?’. While the UK business environment is undoubtedly turbulent at the moment, you should not rush to conclusions when looking for the answer to this question and what that answer might look like in real terms.

The clearest way to understand whether insolvencies are on the rise in the UK is to look at the monthly insolvency statistics released by the Insolvency Service. These statistics reveal the latest number of insolvencies, administrations and bankruptcies and paint a clear picture of the current operating environment in comparison to the previous year. 

The latest insolvency statistics have now been released and there are three key takeaways:

Total Number Of Company Insolvencies Has Risen

Year-on-year, company insolvencies are on the rise. 1,967 companies were registered insolvent in September 2023 which is a 17% increase when compared to the numbers reported in September 2022. This increase in company insolvency rates continues an upward trend since the end of government support measures put in place in response to the COVID-19 pandemic.

CVL Numbers Are On The Up

The overall increase in the number of company insolvencies is largely due to an increase in Creditors Voluntary Liquidations (CVLs). 1,576 of the total 1,967 insolvencies reported were CVLs, indicating that growing numbers of directors are deciding that the best option for their insolvent business is closure. While CVL numbers are typically always higher than compulsory liquidation numbers, these latest statistics highlight that businesses are seeking professional help in response to their financial difficulty rather than waiting until a winding-up petition is potentially enforced by HMRC.

Individual Insolvency Numbers Have Declined

However, company insolvency figures make up only half of the numbers reported by the Insolvency Service this month. In terms of individual insolvencies, the numbers reported are 27% lower than the same month in the previous year. While this appears to be a promising sign, it’s important to take note of the fact that the decline in individual insolvencies is largely due to a number of late registrations of IVAs approved in August and September. Next month’s statistics will help to paint a clearer picture of where individual insolvency trends sit.

Next Steps For Your Business

While the majority of the headline takeaways from this month’s insolvency statistics may be concerning, do not panic. Despite it being a difficult time for UK businesses in pretty much every sector, there are a number of things that you can do to stay ahead of the game. Keep up to date with statistics like these and make sure that you know what to do if you do think that your business is failing.

If you are concerned about the position of your business or facing insolvency, we recommend that you speak to a professional as soon as possible. Getting advice sooner rather than later will increase the likelihood of an outcome suitable for all involved, so don’t hesitate to get in touch with the expert team of insolvency practitioners here at My Liquidation for transparent, trustworthy and tailored advice. 

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