The Insolvency Service has published its monthly report, which contains crucial data on individuals and companies experiencing financial issues and undergoing insolvency procedures.
In August 2023, the amount of registered company insolvencies reached 2,308, which was 19% more compared to the same month in the previous year (1,941 in August 2022). This figure surpassed the levels recorded while the Government support measures were in effect due to the coronavirus (COVID-19) pandemic, and it was also higher than the pre-pandemic numbers. To summarise, the number of company insolvencies in August 2023 increased by 19% compared to August 2022.
Of the 2,308 registered company insolvencies in August 2023, there were:
Figure 1: The number of registered company insolvencies in August 2023 was higher than in the same month last year, driven mostly by a higher number of CVLs. Company insolvencies, England and Wales, August 2019 to August 2023.
For individuals, the total number of insolvencies in August 2023 was 8,536, 11% lower than in the same month in the previous year (9,584 in August 2022).
The individual insolvencies comprised of:
The number of personal insolvencies decreased due to a decline in IVAs, while DRO and bankruptcy numbers increased. However, bankruptcies remained less than half of pre-2020 levels.
Figure 2: Bankruptcy and DRO numbers were higher in August 2023 than in August 2022, while IVA numbers so far in 2023 have been lower than the record-high numbers in 2022. Individual insolvencies in England and Wales between August 2019 to August 2023.
Source: Insolvency Service
Figure 3: The number of administrations in August 2023 was higher than in August 2022 and also higher than in August 2019, while CVAs have remained lower.
CoCredo MD, Dan Hancocks, says: “The corporate insolvency numbers for August were the highest in four years due to a combination of long-term economic problems, tired directors, and pressure from creditors. More companies are entering insolvency proceedings to resolve financial issues or close down.
The number of Creditors' Voluntary Liquidations is still high, as many directors opt to shut down their companies. Additionally, compulsory liquidation figures reached a four-year peak in August as creditors persisted in seeking payment for their debts.
Unfortunately, businesses are facing multiple challenges that are impacting their profitability. One of these challenges is the ongoing issue of cost inflation, which has persisted and is still higher than anticipated despite some expected relief.
Directors should be vigilant for any indications of financial distress within their business and seek advice promptly. If there are concerns regarding suppliers or the company's financial state, please feel free to contact us for assistance.”
Our Monitoring service for UK and International companies helps you stay informed about any changes in their financial performance. This service provides valuable insights to protect your business. You will receive email notifications for a year about any developments, such as payment history, financial performance, and county court judgments. This way, you can take proactive measures if necessary.
Are you interested in sampling our company credit check for free? Our company credit reporting services can help reduce your credit risk and improve your cash flow and productivity. To learn more, don't hesitate to contact us by calling 01494 790600 or emailing us.