16% year-on-year increase in company insolvencies in September

This was 16% higher than the 1,453 figure seen during the same period the previous year, and 11% more than the year-on-year pre-pandemic figure seen in September 2019. Month-on-month, however, there was a 13.5% decrease in company insolvencies.

Like previous months this year, the main driver for this year-on-year increase was been driven by Creditors’ Voluntary Liquidations (CVLs), with there being 1,379 in September. This was four percent higher than in September 2021 and 25% higher than in September 2019. 

Looking at the other types of company insolvency, 204 compulsory liquidations took place in England and Wales - which was 538% higher than in September 2021 but 10% lower than during the same period in 2019. 

Additionally, 85 businesses were placed into administration - which was five percent higher than in September 2021 but 47% lower than in September 2019. As for Creditors’ Voluntary Agreements (CVAs), 11 took place in the month - which was eight percent lower than September 2021 and 50% lower than September 2019. 

Alongside this, between 26 June 2020 and 30 September 2022 40 moratoriums were obtained in England and Wales, while 12 companies had a restructuring plan registered at Companies House. 

Responding to these figures, R3 president Christina Fitzgerald said the figures provide a “clear insight into insolvencies before, during and after the pandemic”. 

She added: “The monthly fall in corporate insolvencies is due to a drop in CVLs, while the year-on-year increase has mainly been caused by a rise in compulsory liquidations, which is likely to be due to the end of legislation around winding-up petitions.

“The increase in corporate insolvencies between September 2022 and September 2019, on the other hand, is due to a significant increase in the number of Creditors’ Voluntary Liquidations.

“This is likely to be due to the triple whammy of the withdrawal of Covid support, the economic turbulence, and the challenging business climate resulting in directors feeling that they are unable to continue and choosing to close their businesses before that choice is taken away from them.

“Businesses have been operating against a backdrop of real uncertainty in recent weeks and months. A volatile pound, a decline in consumer confidence and lower household spending have led to weaker economic growth, and it seems likely that these conditions will get worse before they get better.

“With living costs rising, both business owners and employees are under significant financial strain as rising costs have meant rising salary demands and increasing pressure on margins, which some businesses haven’t, unfortunately, been able to meet.

“Sky-rocketing energy bills are also a major challenge. While the recently announced emergency support package will go some way towards mitigating these concerns, it may not provide enough of a safety net.” 

As for individual insolvencies, 1,812 debt relief orders (DROs) and 535 bankruptcies took place with the bankruptcies made up of 432 debtor applications and 103 creditor petitions. 

Overall, the number of bankruptcies was 15% lower than in September 2021. Broken down, the number of debtor applications was 22% lower but creditor petitions were 34% higher than in September 2021. 

Compared to September 2019, the number of total bankruptcies and debtor applications was 61% lower and creditor petitions 59% lower. 

As for the number of DROs taking place in September 2022, this was 26% lower than in September 2019 and 16% lower than in September 2021. 

Looking at the three-month rolling averages for individual voluntary arrangements (IVAs), meanwhile, there were 7,188 registered per month - which was five percent higher than for the three-month period ending September 2021, but four percent lower during that same period in 2019. 

Overall, personal insolvencies increased by 4.5% to 10,013 when compared to the 9,584 seen in August, and were 0.5% higher than in September 2021. There was, however, a decrease of 18.5% when compared to September 2019. 

Reflecting on these figures, Fitzgerald explained: “When it comes to personal insolvency, the monthly increase has mainly been caused by a rise in the Individual Voluntary Arrangement (IVA) numbers, which suggests that the issues around the cost of living are causing more people to seek help with managing their debts.

“The past couple of years have been extremely tough on many people’s personal finances and household budgets are significantly more stretched than they were a year ago.

“The rise in the cost of living is showing no sign of slowing down, real wages have fallen, and more and more people are being forced to borrow money to pay their bills.” 

As for the figures in Scotland, 103 company insolvencies were registered in September 2022 - 47% higher than during the same period in 2021 and 36% higher than in September 2019. This consisted of 25 compulsory liquidations, 69 CVLs, eight administrations and one CVA. 

In addition to this, between 26 June 2020 and 30 September 2022, no moratoriums were obtained in the country and two companies had a restructuring plan registered at Companies House. 

Looking at the company insolvency figures seen in Northern Ireland, 22 were registered in September 2022 - double the year-on-year number but 39% lower than during the same period in 2019. This was comprised of 18 CVLs, two compulsory liquidations and two CVAs. 

Additionally, 152 individual insolvencies took place in the country - 24% higher than in September 2021 but 52% lower than in September 2019. This 152 figure consisted of 120 IVAs, 24 DROs and eight bankruptcies.

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