Latest figures from the Insolvency Service have shown that the number of business insolvencies in England & Wales increased by 39.4% in March 2022 to a total of 2,114 compared to February’s total of 1,517, and increased by 111.6% compared to March 2021’s figure of 999.
The increase in company insolvencies was driven by an increase in the number 1,844 Creditors’ Voluntary Liquidations (CVLs), which were 62% higher than in March 2019. Other insolvency types were lower than in March 2019, although compulsory liquidation numbers were almost four times higher and administrations were 74% higher than the number in March 2021.
Of the 2,114 registered company insolvencies in March 2022 there were 1,844 CVLs, which is 109% (2.1 times) higher than in March 2021 and 62% higher than in March 2019.
131 were compulsory liquidations, which is 297% (3.97 times) higher than March 2021, but 45% lower than March 2019, 10 were CVAs, which is the same as March 2021 but 66% lower than March 2019.
There were 129 administrations, which is 74% higher than March 2021 but 26% lower than March 2019; and there were no receivership appointments.
The figures were also 71.2% higher than in March 2020 (1,235).
Commenting on the figuresColin Haig, President of R3, the insolvency and restructuring trade body said “The increase in corporate insolvencies in March was driven by an increase in the number of Creditor Voluntary Liquidations (CVLs), a procedure initiated by directors of insolvent firms to close their company, which were almost 40% higher than the previous month.”
“This suggests that many company directors have seen the increasingly difficult short-medium term economic prospects as something they won’t be able to overcome – and have closed their companies ahead of time.”
“The figures reflect the challenge businesses in England and Wales continue to face. They have gone from trying to trade through a global pandemic to trading while the costs of fuel and energy rise, and while staff are concerned about whether their wages can cover the increased costs of living. Both firms and individuals have barely had time to draw breath.:
“And market conditions are far from ideal. While spending is higher than it was this time last year and in 2019, rising inflation has meant people are spending the majority of their money on general living costs.”
“Consumer confidence is low as people are concerned about their finances and the future of the economy, and with inflation rising, they’re reluctant to make major purchases. This is a situation which looks unlikely to change in the near future.”