Company insolvencies rise by 16% in June

The 2,361 figure is also 17% higher than in June 2023, and remained higher than those seen both during and before the Covid-19 pandemic. Of this figure, 1,866 were creditors’ voluntary liquidations (CVLs), 302 compulsory liquidations, 170 administrations and 23 company voluntary arrangements (CVAs).  

This is a turnaround for the worse, with ReSolve’s managing partner Mark Supperstone explaining that: “High borrowing costs and wage growth are still very a much a concern to business owners as a drop in interest rates is now perhaps unlikely to take place until later this year, although there is still hope of a reduction in August.  

He went on say: “As such, the volatility seen in recent ONS insolvency statistics is also likely to persist in the coming months, with the prospect of a significant plateau or fall in insolvencies unlikely to take place until 2025. 

“However, now that the general election behind us and the new government is in place, businesses should begin to feel that the trading environment is more certain and therefore they should feel more confident in taking decisive action.” 

R3 vice president Tom Russell added: “The reality is that businesses are still trading amidst high costs and cautious consumer spending, and despite recent more encouraging economic data pointing to increase economic growth and falling inflation, the trading environment is still challenging for many businesses, and it seems that the economic improvement has come too late for some.  

“While retail sales rebounded in May, they are still down year-on-year, and restaurant spending fell again last month as consumers continued to be cautious with discretionary spending to save money.  

“These sectors have struggled since the start of the year and have yet to bounce back from a disappointing pre-Christmas trading period, so we may see insolvency numbers increase in the Autumn if trading conditions don’t improve.” 

Individual insolvencies, meanwhile, rose by 11% month-on-month in England and Wales – up to 10,395. Broken down, well over half – 5,361 – were made up of individual voluntary arrangements (IVAs), 4,383 were debt relief orders (DROs) – up to their highest level since January 2021 – and 651 were bankruptcies.  

Reflecting on this, Russell said: “The cost of living is still hitting people hard with prices remaining high even as the annual rate of inflation falls to a more typical level.  

“The price of food, fuel and energy remains an issue for many, and consumers remain worried about the future of the economy, reluctant to make major purchases and cautious with their discretionary spending.  

“Although inflation and food inflation are falling and a new energy price cap and the warmer weather will likely lead to a drop in energy bills, people have yet to see the financial benefits of these, or of the overall improvement in the economy.”  

Turning to Scotland, company insolvencies fell by four percent year-on-year to 109 in June 2024. This was comprised of 60 CVLs, 43 compulsory liquidations and six administrations. 

By contrast, there was a 13% year-on-year increase in company insolvencies in Northern Ireland – going up to 17. Of this, eight were compulsory liquidations, seven were CVLs, while there was one CVA and one administration respectively.

However, there was a 59% drop year-on-year in individual insolvencies in the country – falling to 126, made up 87 IVAs, 21 DROs and 18 bankruptcies.