Company insolvencies are 81% higher than the same time last year. Between the 1st April and 30th June 2022 (Q2 2022), there were 5,629 (seasonally adjusted) registered company insolvencies, comprising 4,908 creditors’ voluntary liquidations (CVLs), 368 compulsory liquidations, 320 administrations, 32 company voluntary arrangements (CVAs) and one receivership appointment. That’s 13% more insolvencies than Q1 2022.
The number of CVLs increased to the highest quarterly level since the start of the series in 1960. The number of compulsory liquidations also increased, but remained lower than levels seen before the coronavirus (COVID-19) pandemic. One in 228 active companies (at a rate of 43.9 per 10,000 active companies) entered liquidation between 1 July 2021 and 30 June 2022. This was an increase from the 26.1 per 10,000 active companies that entered liquidation in the 12 months ending 30 June 2021.
The above statistics pertain to registered companies, but sole traders and partnerships are feeling the squeeze too. Very little help was available for these businesses during the period of the pandemic and now many businesses are seeing their energy costs skyrocket, a common fixed price deal now being around 60p per KWh plus a £3 daily standing charge. The hospitality sector is suffering too, from a lack of suitable workers, due to Brexit and the Covid Lockdowns. Whoever becomes the next Prime Minister will have a lot to deal with. The situation is now looking worse than the 1970’s.