Home Business News Insolvencies in England & Wales shows signs companies are struggling

Insolvencies in England & Wales shows signs companies are struggling

by Amy Johnson LLB Finance Reporter
16th Jan 24 11:39 am

Company Insolvencies in December up 2% year-on-year at 2,002 and individual Insolvencies are falling 20% year-on-year to 6,584, although Debt Relief Orders are up 25% year-on-year.

This was higher than levels seen when the government support measures were in place in response to the pandemic and also higher than pre-pandemic numbers.

The company insolvencies consisted of 153 compulsory liquidations, 1,731 creditors’ voluntary liquidations (CVLs), 103 administrations and 15 company voluntary arrangements (CVAs).

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CVL numbers were higher than in December 2022, while compulsory liquidation and administration numbers were lower.

The individual insolvencies consisted of 496 bankruptcies, 2,472 debt relief orders (DROs) and 3,616 individual voluntary arrangements (IVAs).

The lower number of individual insolvencies compared to December 2022 was driven by a 38% decline in the number of IVAs.

IVA numbers in 2023 were lower than in 2022, which saw a record high annual number.

Nicholas Hyett, Investment Manager at Wealth said, “December is a seasonal low point in terms of insolvencies – with the smaller number of working days affecting the number of insolvencies that are registered.

“However, a 2% increase year-on-year suggests that companies are struggling with the higher interest rate environment. January’s numbers are worth watching closely, since a disappointing festive period can be the nail in the coffin for businesses that are already under pressure.

“Individuals though seem to be faring better.

“That could be down to increased forbearance on the part of banks after the government lent on the sector to support mortgage holders back in the summer, although increases in Debt Relief Orders and Bankruptcies shows there is clearly financial stress out there, particularly among the less well off.”

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