Insolvencies Rise to Pre-Pandemic Levels

The latest figures from the Insolvency Service show company insolvencies reached their highest level since the first UK lockdown, with businesses balancing the easing of restrictions with the end of government support. There was a total of 1,348 registered company insolvencies last month, compared to 1,097 in July. This marks a 71% increase on the figures recorded in August 2020.

The report shows there were 1,256 Creditors’ Voluntary Liquidations among the insolvencies, with just 35 compulsory liquidations. 1,714 debt relief orders were also recorded for individuals during August, which was 29% higher than during August 2020. Furthermore, 614 bankruptcies were registered – 22% lower than August 2020 and 54% lower than August 2019.

For Bob Pinder, Director at the Institute of Chartered Accountants in England and Wales, he believes it is too early to be called a trend:

“It’s a fine balance at the moment for businesses,” said Pinder. “In some ways, it’s a tougher climate than August 2020 because of the winding down of government support, and there will be some businesses that have struggled through 18 months exiting now due to factors such as rising costs or staff shortages.

“However, it’s the first set of numbers that shows a distinct rise in insolvencies, so it’s too early to draw many conclusions at the moment. Our advice for business or individuals is always to take advice early from a qualified individual – that way you’ll have more options,” concluded Pinder.