Last updated: 18 Dec 2023 10:00 Posted in:
The number of company insolvencies in November 2023 jumped by 21% compared with the same month in 2022, according to the Insolvency Service’s latest Monthly Insolvency Statistics report.
The report found that around 2,466 companies registered for insolvency throughout the month. This was higher than levels seen while the Government support measures were in place in response to the coronavirus (Covid-19) pandemic and also higher than pre-pandemic numbers.
The company insolvencies consisted of 359 compulsory liquidations, 1,962 creditors’ voluntary liquidations (CVLs), 133 administrations and 12 company voluntary arrangements (CVAs).
The increase in company insolvencies compared to November 2022 was driven by CVLs and compulsory liquidation numbers, while administration numbers remained similar to November 2022 at slightly less than 2019 levels.
Nicky Fisher, President of R3, the UK’s insolvency and restructuring trade body, commented: “The monthly and year-on-year rise in corporate insolvency levels is driven by an increase in Creditors’ Voluntary Liquidations and Compulsory Liquidations, as more directors choose to close down their businesses while that choice is still theirs and more creditors are pursuing debts they are owed as they attempt to balance their own books.
“But the figures also take 2023’s corporate insolvency figures to the highest annual total since 2009. The fact that corporate insolvency numbers have reached a 14-year high is partly because of the Covid hangover, which was a result of insolvency numbers being supressed by Government support measures, but also as a result of a relay of economic issues that have taken their toll on businesses.”
She added: “The past year has been especially tough. Costs have increased, people have been reluctant to spend money as they worry about paying for the basics, and high interest rates have made paying debts or securing funding incredibly difficult.
“This point of the year is a critical time for many businesses, and if it doesn’t deliver the rise in revenues many are hoping for, we could see insolvency numbers increase further next month.”
“This point of the year is a critical time for many businesses, and if it doesn’t deliver the rise in revenues many are hoping for, we could see insolvency numbers increase further next month.”
Nicky Fisher, President, R3