According to UK government figures, the number of registered company insolvencies in England and Wales reached 2,361 in June 2024, marking a 16% increase from May 2024’s total of 2,040 and a 17% rise from June 2023, which saw 2,016 insolvencies.
The figures, adjusted for seasonal variations, indicate a significant increase compared to the insolvency rates observed both during the COVID-19 pandemic and the pre-pandemic years between 2014 and 2019.
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The June 2024 insolvencies comprised 302 compulsory liquidations, 1,866 creditors’ voluntary liquidations (CVLs), 170 administrations, and 23 company voluntary arrangements (CVAs).
All categories of insolvency experienced higher numbers than those recorded in both the previous month and the same month of the previous year.
From 1 July 2023 to 30 June 2024, one in every 179 companies on the Companies House effective register, equating to a rate of 55.8 per 10,000 companies, entered insolvency. This represents an increase from the rate of 55.1 per 10,000 companies observed in the 12 months ending 30 June 2023. These 12-month rolling rates are used to provide a clearer view of long-term trends, reducing the volatility of month-to-month estimates.
Despite the rise in insolvency rates since the lows of 2020 and 2021, the current rate remains considerably lower than the peak observed during the 2008-09 recession, which saw 113.1 insolvencies per 10,000 companies. This reduction is attributed to the significant increase in the number of companies on the effective register, which has more than doubled since that period.
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By GlobalDataJonathan Andrew, CEO of Bibby Financial Services, highlighted that “despite confidence emerging in some sectors,” the current figures “reflect a challenging economic environment that continues to put UK businesses under genuine strain.”
He pointed out that for SMEs, “there’s a clear divide between those businesses able to weather the challenges of recent years, and those who are being pushed to the brink by supply chain disruption, late payment, and bad debt.”
Andrew emphasised that “while there’s no silver bullet to fix this,” it is critical that viable SMEs “don’t fall through the cracks as things begin to stabilise.” He noted that “access to finance for SMEs is a particular area that requires attention from the new Government,” suggesting that a starting point should be to “reform and strengthen the underused Bank Referral Scheme.” This, he argued, would enable SMEs to “access a wider array of financing options” to help them overcome challenges associated with cashflow pressures due to late payment or protracted default.
Bank Referral Scheme overhaul at top of NACFB Budget wishlist
