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Drop in both month-on-month corporate and personal insolvencies

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Corporate insolvencies fell by 3.25% in December 2022 with a total of 1,964 taking place in England and Wales, according to the Insolvency Service’s latest figures.

This figure is, however, 32% higher year-on-year in 2021 and is 76% higher than was registered in the same month in 2019.  

 

Broken down, 1,658 creditors’ voluntary liquidations (CVLs) took place in December 2022 – 22% higher than in 2021 and more than twice as many as in 2019. In contrast, the number of administrations and company voluntary arrangements remained lower than before the pandemic but were higher than in December 2021.  

 

Meanwhile, 183 compulsory liquidations took place in December 2022 – 259% higher than in December 2021 and eight percent higher than in December 2019.  

 

Responding to these figures, R3 president Christina Fitzgerald said: “The monthly fall in corporate insolvencies is driven by a fall in compulsory liquidation and administration numbers. However, corporate insolvencies have increased compared to last year and three years ago due to an increase in CVL and compulsory liquidation numbers. 

 

“This is due to a combination of directors choosing to close their businesses and creditors chasing unpaid debts due to changes in legislation as both ends of the supply chain remain squeezed by ongoing issues around consumer confidence, rising costs, and requests for increased wages. 

 

“December and January are critical periods for many firms, and these issues, combined with strikes, bad weather and the economic challenges the UK has faced over the last three years may have dealt a further blow to businesses and business owners.” 

 

Personal insolvencies also decreased month-on-month in England and Wales, dropping by 20.4% to 8,339 in December 2022 when compared to 10,473 in November. The 8,339 figure was however 1.3% lower than in December 2021 and 0.8% lower than in December 2019.  

 

Commenting on this, Fitzgerald said: "Despite the fall in personal insolvency numbers, it’s been a bleak winter for consumers in England and Wales.  

 

“Worries about the cost of living are still front of mind, with paying for food, energy and fuel the main areas of concern and with reports this week that price pressures are unlikely to ease anytime soon. Money worries are front of mind for a lot of people at the moment, and they are only spending on the basics – or on items that will help them cut costs elsewhere. 

 

“We’re also seeing more and more people turn to borrowing to pay their bills, and while the reasons behind this course of action are understandable, debt on top of debt isn’t a sustainable solution. 

 

“It’s likely we’re facing a precipice situation where the strains of rising living costs, wages failing to keep up with inflation and more people living in negative budgets suggests those who are struggling are running out of road and that personal insolvencies are likely to increase into 2023.” 

 

As for company insolvencies in Scotland, 114 were registered in December 2022 – 23% higher than during the same period last year, and 28% higher than in December 2019. The 2022 figure was comprised of 22 compulsory liquidations, 85 CVLs and seven administrations.  

 

In Northern Ireland, 15 company insolvencies were registered – 67% higher than in December 2021, but 53% lower than in 2019. This was comprised of 11 CVLs, two compulsory liquidations and two administrations.

 

Meanwhile, 123 individual insolvencies took place in the country – 52% higher than in December 2021 but 12% lower than during the same month in 2019. This consisted of 109 individual voluntary arrangements, seven debt relief orders and seven bankruptcies.  

 

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