The Insolvency Service has released the latest figures for UK insolvencies in March 2024.
In March 2024, the number of registered company insolvencies in England and Wales was 1,815, 17% lower than the figure recorded in the same month in the previous year (2,193 in March 2023). However, it is essential to note that company insolvencies are still significantly higher than those seen during the COVID-19 pandemic and between 2014 and 2019.
Of the 1,815 registered company insolvencies in March 2024:
Numbers of all types of company insolvency were lower than in March 2023 and February 2024.
One in 179 companies on the Companies House effective register entered insolvency between 1 April 2023 and 31 March 2024.
While the insolvency rate has increased compared to the lows seen in 2020 and 2021, it is still significantly lower than the peak of 113.1 per 10,000 companies during the 2008-09 recession. This positive trend is primarily because the number of companies on the effective register has more than doubled, indicating a growing and diverse business landscape.
Figure 1: Company insolvencies by type, England and Wales, March 2019 to March 2024, seasonally adjusted
Sources: Insolvency Service (compulsory liquidations only); Companies House (all other insolvency types)
Creditors’ Voluntary Liquidations (CVLs)
In March 2024, 79% of all company insolvencies were CVLs. The number of CVLs decreased by 18% from February 2024 and was 19% lower than in March 2023 after seasonal adjustment.
In 2023, the number of CVLs (Company Voluntary Liquidations) reached its highest annual level since 1960, when record-keeping began increasing yearly since 2021. Between 2017 and 2019, an annual increase of approximately 10% in CVLs decreased due to the COVID-19 pandemic, resulting in the lowest levels seen since 2007.
The number of seasonally adjusted compulsory liquidations in March 2024 was 3% lower than in February 2024 and 9% lower than in March 2023.
The number of compulsory liquidations in 2023 increased by 44% from 2022 but remained 4% lower than in 2019 (pre-pandemic levels). Numbers have increased from record low levels seen in 2020 and 2021 while restrictions applied to statutory demands and certain winding-up petitions (leading to compulsory liquidations).
After seasonal adjustment, the number of administrations in March 2024 was 30% lower than in February 2024 and 14% lower than in March 2023.
The number of administrations increased during 2022 and 2023 from an 18-year annual low number seen during the COVID-19 pandemic in 2021. Current levels are similar to those seen between 2015 and 2019.
CVAs were 25% lower in March 2024 than in March 2023 and 31% lower than in February 2024. Numbers remain low compared to historical levels.
The contrast between the number of CVAs in 2023 and 2022 is striking. In 2023, the number was 68% higher than in 2022, which saw the lowest-ever annual total in the time series going back to 1993. However, it's worth noting that the number in 2023 remained approximately half of the 2015 to 2019 level, indicating a significant change in the trend.
The five industries (in accordance with SIC 2007) that experienced the highest number of insolvencies in the 12 months to February 2024 were:
How our UK Company Credit Checks service can help
For over 20 years, CoCredo has provided online business credit reports, related company credit score information, and financial data to businesses and suppliers in the UK and internationally.
Dan Hancocks, CoCredo, MD says: “In the first quarter of this year, businesses have faced significant challenges, including high costs and constrained spending. However, we can confidently say that the latest sectoral data shows that the construction industry is currently the most vulnerable to insolvency. The figures for this sector from November 2023 to January 2024 are slightly higher than in the same period last year, making it crucial for businesses in this industry to take proactive measures to mitigate risks and ensure their financial stability.
“Despite the challenging trading climate, there are promising signs that business directors are optimistic about a potential revenue increase this year. This positive sentiment within the business community is a testament to their resilience. However, it remains to be seen whether the expected growth in income will outpace potential increases in costs and wages and whether inflation will decrease at a sufficient rate to benefit businesses.”
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