Key Takeaways From September 2022’s Insolvency Statistics
Every month, new insolvency statistics are released by The Insolvency Service. These insolvency figures contain up-to-date information on the number of corporate and personal insolvencies that have occurred in the UK. These figures are crucial for providing an insight into how businesses and individuals are being impacted in the current economic climate, and where the main stress factors lie. In the past week, the most recent insolvency statistics for September 2022 have been released. The key factors to take away from the latest insolvency figures are as follows:
There Were 1,679 Registered Company Insolvencies In September 2022
The total number of company UK insolvencies was 1,679. The breakdown of insolvency statistics showed that a whopping 1,379 of these were Creditors Voluntary Liquidations (CVLs). Alongside the high number of CVLs contributing to this total, there were 204 compulsory liquidations, 85 administrations, and 11 Company Voluntary Arrangements (CVAs). The number of compulsory liquidations and administrations were both higher than the insolvency statistics for the same time last year, indicating a rise in the number of businesses being forced to close their doors.
The Number Of Company Insolvencies Is Higher Than Pre-Pandemic Levels
The total number of corporate insolvencies for September 2022 was 16% higher than September last year, and 11% higher than September 2019, before the pandemic.
Christina Fitzgerald, the President of the insolvency and restructuring trade body, R3 has commented on this increase, emphasising that the rise in the number of CVLs “is likely to be due to the triple whammy of the withdrawal of Covid support, the economic turbulence, and the challenging business climate resulting in directors feeling that they are unable to continue and choosing to close their businesses before that choice is taken away from them.”
Fitzgerald added further that “Businesses have been operating against a backdrop of real uncertainty in recent weeks and months. A volatile pound, a decline in consumer confidence and lower household spending have led to weaker economic growth, and it seems likely that these conditions will get worse before they get better.”
The Increase In UK Insolvency Rates Is Driven By The Number Of CVLs
The increase in corporate UK insolvencies over the past few years has been driven by a consistent increase in the number of CVLs. The 1,379 CVLs that took place in September 2022 were 4% higher than in September 2021, and 25% higher than in September 2019. As we touched on a second ago, there are many different factors that have influenced these insolvency statistics. In a turbulent economic climate where consumer habits are changing, energy prices are rising and inflation remains high, many business owners are choosing to close their doors before financial stress forces them to do so.
Why Consider Voluntary Liquidation?
The recent insolvency statistics reflect the challenging economic conditions that UK business owners are facing. So, if you’re concerned about the future of your company, you’re most certainly not alone. Whatever concerns you may have, it’s essential to seek the advice of a licensed insolvency practitioner as early as possible. If your business is struggling, the most appropriate decision may be to voluntarily liquidate your company. The process for this is a Creditors Voluntary Liquidation if your company is insolvent, or a Members Voluntary Liquidation if your company is still solvent. Taking control of the closure of your company is far more beneficial than enabling issues to escalate, and potentially being forced into compulsory liquidation. This leaves you with no control over your business, and will involve an invasive investigation of the director’s conduct. Voluntarily choosing to liquidate your company enables you to claim statutory entitlements, with the peace of mind that all affairs are wound up correctly so that directors can trade under a new company name in the future.
To discuss the options that might be available to you, please don’t hesitate to get in touch with our experienced team at My Liquidation.
