Company insolvencies jump by two percent in September

The 1,973-figure seen in September is, however, seven percent lower than during the same month in 2023. Meanwhile, the number of company insolvencies remained much higher than those seen both during the Covid pandemic and between 2014 and 2019.  

Broken down, the numbers seen in September this year consisted of 1,575 creditors’ voluntary liquidations (CVLs), 226 compulsory liquidations, 155 administrations and 17 company voluntary arrangements (CVAs).  

R3 president Tim Cooper said: “Although corporate insolvencies have only risen by a small percentage compared to last month, the business climate remains difficult as firms face a multitude of issues including ongoing cost challenges, uncertainty around announcements in the Budget and the potential knock-on effects of the conflict in the Middle East. 

“Firms are worried about the impact future tax rises could have on their bottom lines, and members are telling us that there’s an increased demand for advice and support around Member Voluntary Liquidations as directors look to take steps to reorganise their business and its finances ahead any potential tax changes in the Budget. 

“The conflict in the Middle East will likely affect UK businesses. Increased instability in the region could disrupt trade routes and supply chains, affecting businesses that rely on imports or exports from the Middle East.  

“Businesses will have to weigh up whether they pass any cost increase onto customers or absorb it themselves. This is particularly relevant for sectors like energy, manufacturing, and retail.” 

Turning to individual insolvencies, these rose by six percent month-on-month to 10,651 in England and Wales. This was also 44% higher than in September 2023.  

Of the 10,651, 6,052 were individual voluntary arrangements (IVAs), 4,032 were debt relief orders (DROs) and 567 were bankruptcies.  

On this, Cooper said: “It’s clear money worries continue to weigh heavily on consumers, with the health of the economy and their personal finances, and the costs of housing, fuel and energy front of mind for many.  

“Wherever they can, people are looking to save money – looking for bargains on their weekly shop and currently only spending small amounts on treats or non-essentials – and are reluctant to make major purchases as they attempt to save or manage their expenses. 

“There will be some hope that the surprising fall in inflation to 1.7% for the first time in a long time may give some interim relief for household budgets.  

“Homeowners in particular may be seeking to benefit from a competitive mortgage market for better fixed rate mortgages, and hoping that this surprising inflation figure is a prelude to further interest rate cuts.  

“However, any optimism would be cautious, as the initial reactions to the inflation figures indicate that there is an expectation they will increase by the end of the year.” 

In Scotland, 73 company insolvencies in September – a drop of 16% year-on-year. These were comprised of 48 CVLs, 18 compulsory liquidations and seven administrations.  

In Northern Ireland, 28 company insolvencies took place – 24% lower than in September 2023 – and comprised of 15 compulsory liquidations, 10 CVLs, two administrations and one CVA.

 
As for individual insolvencies, 155 took place in the month – an increase of 20% when compared to September 2023. These consisted of 112 IVAs, 24 bankruptcies and 19 DROs.