Corporate insolvencies increased by 37.7% in March 2023 to a total of 2,457 compared to February’s total of 1,784, and increased by 15.9% compared to March 2022’s figure of 2,120.
Corporate insolvencies increased by 145.9% from March 2021’s total of 999 and by 99.3% from March 2020’s total of 1,233.
Corporate insolvencies also increased by 55.4% compared to pre-pandemic levels in March 2019 (1,581).
Personal insolvencies increased by 38.9% in March 2023 to a total of 11,438 compared to February’s total of 8,237, and decreased by 1% compared to March 2022’s figure of 11,554.
Personal insolvencies increased by 4.4% from March 2021’s total of 10,954 and increased by 46% from March 2020’s total of 7,832.
Personal insolvencies also decreased by 6.4% compared to pre-pandemic levels in March 2019 (12,216).
Eleanor Temple, chair of the insolvency and restructuring trade body R3 in Yorkshire and a barrister at Kings Chambers in Leeds, responds to the publication of the March 2023 insolvency statistics for England and Wales:
“The rise in corporate insolvencies – to the highest levels for more than three years – has been driven by increasing numbers of Creditors’ Voluntary Liquidations, which are also at a three-year high.
“Business owners have spent three years trading through a pandemic and economic uncertainty, and an increasing number are choosing to shut their businesses before that choice is taken away from them and as the turbulent trading climate proves too much.
“Businesses across Britain are struggling at the moment. Costs continue to rise at a time when consumers are cutting back on discretionary spending, and when staff are requesting pay rises to cover their bills.
“With the Government’s Energy Bill Relief Scheme ending at the end of March, many businesses will be facing further increases in costs at a time when they can ill-afford them.
“Directors need to be vigilant about the signs of financial distress and seek advice as soon as they spot issues with their business or begin to worry about its finances.
“If stock is starting to pile up, cashflow is an issue, or the business is having problems paying rent, staff or suppliers, now is the time to seek advice, rather than further down the line when these issues have evolved into problems.
“Turning to personal insolvencies, while numbers have increased for all personal insolvency processes, the monthly increase has mainly been driven by rises in Individual Voluntary Arrangement and Debt Relief Order numbers.
“This suggests that the cost-of-living crisis is having an affect on people’s solvency, but that a greater number are coming to an arrangement with their creditors without requiring a bankruptcy process.
“Many people are concerned about their finances at the moment. As cost-of-living continues to be a serious issue, people are cutting back on discretionary spending and are less likely to make major purchases as they save their money for the basics.
“With the cost of food and energy continuing to be a concern, people are worried about their finances, inflation and interest rate rises.
“Consumer borrowing is increasing as more people turn credit to help ease the strain on their finances and with the cost of debt on the rise it is no surprise that last week several UK lenders reported a rise in household defaults.
“We know how hard it can be to discuss your money worries, but talking about your problem is the first step towards finding a solution and we urge anyone who is worried about money to seek advice as soon as possible.
“Doing so will give you more time to take a decision about your next step and more options for improving your situation than if you’d waited till the issue became more serious.
“Most R3 members will give a free consultation to prospective clients, so they can understand more about their situation and outline the potential options for resolving it.”