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Broken piggy bank in water AccountingWEB Company insolvencies reach a four-year high for December

Insolvencies reach a four-year high for December


The Christmas period was not as successful as companies hoped, with company insolvencies hitting 2,002. This marked a 2% increase from 2022, a 34% increase from 2021, and a substantial 79% increase from December 2019.

16th Jan 2024
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The latest insolvency statistics for December showed a four-year high, reflecting the end of a tough year for businesses in England and Wales. The insolvency services reported 2,002 registered company insolvencies in December, up from 1,964 in December 2022.

This increase was primarily driven by creditors’ voluntary liquidations (CVL), constituting 1,731 of the company insolvencies in December – a notable rise compared to December 2022. However, compulsory liquidations accounted for 153 and administrations accounted for 103 of the company insolvencies, both lower than the figures reported in December 2022.

The trend of rising insolvencies was seen across the United Kingdom, where Northern Ireland witnessed a substantial 67% increase with 25 company insolvencies in December compared to the same period in 2022. In contrast, Scotland diverged from the trend, reporting 108 company insolvencies, a 5% decrease from December 2022.

A difficult December 

Nicky Fisher, president of R3 shared that these insolvencies would likely have been down to firms facing additional expenses, alongside the slowing down of consumer spending and rising energy costs. 

“At the end of a tough year, these extra costs could have been the final blow for many businesses and may have led to their directors turning to an insolvency process to resolve their firm’s financial issues,” Fisher said. 

Given that December typically sees a dip in insolvencies, the 2% rise from December 2022 and only a 14% decrease from November 2023 suggests that companies are struggling. 

Fisher continued, “If the new year trading period hasn’t improved on the one before Christmas, we could see insolvency numbers continue to rise, as businesses who had banked on a festive income boost to cover the shortfall in their income turn to the profession for help.”

Uncertainty for 2024

January could therefore be another month of rising insolvencies and 2024 seems uncertain for many. 

Matthew Padian, restructuring and insolvency partner at Stevens & Bolton said it is difficult to predict how UK businesses will cope this year. “While interest rates may have stabilised and inflation shows a downward trend, new challenges exist. Increases to supply-chain costs due to the Red Sea crisis, reports that some lenders are declining to lend to certain borrowers, and the prospect of a further increase in the national living wage from 1 April 2024, will ramp up the pressure on businesses this year,” he said.

Padian predicts that 2024 could be similar to 2023, with a few standout corporate failures like Wilko, but in general a mixed picture of successes and failures. 

He shared that, “It will likely be businesses in the construction, retail and dining industries that will be among those experiencing the toughest next 12 months.”

Guidance amid challenges 

With a potential for a further increase in insolvencies this month, it is important to seek advice as soon as possible. 

Fisher offers guidance for those who are worried about money: “We know it’s a hard conversation to have, let alone start, but talking about your worries at an early stage will give you more time to take a decision about your next step and more potential options for moving forward.”

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