The Insolvency Service has released its latest monthly report to offer current data on the number of individuals and companies unable to pay their debts and undergoing formal insolvency proceedings.
The number of registered company insolvencies in May 2023 was 2,552, 40% higher than in the same month in the previous year (1,825 in May 2022), reaching levels not seen since the Government's support measures were in place in response to the coronavirus (COVID-19) pandemic and higher than pre-pandemic numbers.
Of the 2,552 registered company insolvencies in May 2023:
There were 189 compulsory liquidations in May 2023, 34% higher than in May 2022. Numbers of compulsory liquidations have increased from historical lows seen during the coronavirus pandemic, partly due to increased winding-up petitions presented by HMRC.
In May 2023, there were 2,181 Creditors’ Voluntary Liquidations (CVLs), 38% higher than in May 2022. The numbers of administrations and Company Voluntary Arrangements (CVAs) were higher than in May 2022.
Figure 1: The number of registered company insolvencies in May 2023 was higher than in the same month last year, driven by a higher number of CVLs. England and Wales, May 2019 to May 2023.
Source: Insolvency Service
There were 2,505 Debt Relief Orders (DROs) in May 2023, 23% higher than in May 2022. Monthly DRO numbers may be volatile at present due to the introduction of new DRO hubs.
There were 2,505 DROs and 617 bankruptcies in May 2023 in England & Wales.
The bankruptcies were made up of 521 debtor applications and 96 creditor petitions. Defaults were 5% higher than in May 2022. Debtor applications were 5% higher, but creditor petitions were 3% higher than in May 2022.
The number of DROs in May 2023 was 23% higher than in May 2022.
Figure 2: DRO numbers may be volatile due to the introduction of DRO Hubs. Bankruptcies have remained stable since May 2022. IVA numbers in 2023 have been lower than the record-high numbers in 2022. England and Wales, May 2019 to May 2023.
There were, on average, 6,767 Individual Voluntary Arrangements (IVAs) registered per month in the three months ending May 2023, which is 14% lower than the three months ending May 2022.
Dan Hancocks, CoCredo MD, says: “The past three years of economic instability have been difficult for businesses. Today's published company insolvency figures are the highest since January 2019. The pandemic, rising costs, increased pressure from creditors, and high inflation have led more businesses to turn to insolvency processes to address their financial problems.
Moving forward, businesses may need help seeking funding during the summer due to interest rates and inflation, which could be especially difficult for struggling companies."
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