Latest Insolvency Statistics Released Ahead Of Christmas Trading Period
It’s a critical time of year for businesses across the UK, with the Christmas trading period now in full swing. Particularly in the retail and hospitality sectors, this period can be make or break, with fruitful Black Friday and Christmas shopping demand giving many the boost they need to kick on into the New Year. However, this time of year also comes with its share of challenges. The need for a successful festive period can be overwhelming for many businesses while the recent Autumn Budget will require many to take time to reassess 2025 plans ahead of the new year.
With a lot to consider, many businesses will be using this time to reflect on current performance as a marker for any next steps. One of the most valuable ways you can do this is by situating your own successes and challenges within a wider market context. The latest insolvency statistics, published by the Insolvency Service, offer a fantastic grounding for this process as they detail overall company insolvency levels for this previous month alongside monthly, yearly and seasonal trends. The My Liquidation team has broken this data down so that you can understand the current state of play according to the latest insolvency statistics and how might this affect your business outlook as we approach the festive season.
The Headline
The latest insolvency statistics cover company insolvency data from October 2024, including the exact number of compulsory liquidations, creditors voluntary liquidations (CVLs), administrations and company voluntary administrations (CVAs) registered throughout the month.
There were 1,747 registered company insolvencies in England and Wales in October 2024, made up of 188 compulsory liquidations, 1,445 CVLs, 100 administrations and 12 CVAs. But beyond the numbers, what does this actually mean?
The Landscape Is Brighter Than Last Year
The first key takeaway from the latest company insolvency statistics data is that the general outlook is more favourable than this time last year. In fact, the overall number of registered company insolvencies was 24% lower than in October 2023 (and also 10% lower than last month, where a total of 1,950 company insolvencies were registered). A number of factors could have contributed to this reduction in company insolvency levels, including interest rate cuts. This should give your business some confidence heading into the Christmas trading period, as it implies that consumers are more willing to spend than they were last year.
Voluntary Liquidations Exceed Compulsory Liquidations
Further emphasising the general mood of optimism in this month’s insolvency statistics is the fact that the use of voluntary insolvency methods far exceeds the number of compulsory liquidations. CVLs accounted for 83% of all company insolvencies while the seasonally adjusted number of compulsory liquidations was 20% lower than October last year. While these figures do indicate that many businesses are having to liquidate due to financial pressures and subsequent insolvency, they are able to do so on better terms. If businesses are to wait until a winding up petition is enforced by HMRC, there is little assurance that creditors will get paid. Opting for a CVL instead demonstrates that company directors are willing to find the most suitable solution and secure the best outcome possible in the circumstances.
COVID Still Looms
Despite overall positive trends in the latest insolvency statistics, it’s important to be aware the company insolvency levels are still significantly higher than the lowest monthly volumes on record during a period of government support throughout the COVID-19 pandemic. Many businesses are still struggling to recover amidst the challenges of the post-COVID economic landscape, and we are yet to return to the days of approximately 1,000 company insolvencies per month as seen prior to the pandemic.
Next Steps For Your Business
With a general decline in insolvency levels compared to last year, we urge businesses to celebrate their successes heading into the Christmas period. However, it is important that you situate these celebrations within the wider context of the upcoming new year and the new challenges you may have to face. Though it does feel like the key festive trading period will be positive for many, it’s important to remember that consumers are still making difficult decisions due to the high cost of living. Simultaneously, you will also have to plan for the possibility of increased costs in 2025 as the government makes changes to required employer National Insurance contributions.
The importance of seeking reliable advice if you are concerned about the resilience of your business should therefore not be understated. If you are concerned about the possibility of insolvency or are finding that your own performance does not match wider market trends, now is the time to act. Speak to a professional now to ensure you are equipped with the right advice and information to secure the best outcome for your business.
At My Liquidation, we have a wide range of experience assisting companies in these circumstances. We can provide you with reliable liquidation advice and explore all of your options, including a CVL. Get in touch today to find out more.
