A guide, not advice. This explains how things generally work. A licensed insolvency practitioner will tell you what applies to your company or to you.
UK Insolvency Statistics and Trends
Understanding the wider picture of UK insolvency helps businesses anticipate risk and make informed decisions. The Insolvency Service publishes regular statistics on corporate and personal insolvency, and the trends reveal both the challenges and the patterns of business failure.
Recent Trends in Corporate Insolvency
In recent years, corporate insolvencies in England and Wales have run at elevated levels compared to the pre-pandemic period. The most common procedure by some margin has been the Creditors' Voluntary Liquidation (CVL) - which accounts for the majority of company insolvencies. Administrations and CVAs have accounted for a smaller share.
Key factors behind elevated corporate insolvency levels include:
- Rising costs - energy, materials, and wages
- The end of pandemic support - loan repayments and the withdrawal of temporary measures
- HMRC enforcement resuming after a pause
- Economic uncertainty and weak consumer demand in some sectors
Sectors Most Affected
Insolvency has not been even across the economy. Sectors particularly affected have included:
- Construction
- Hospitality and leisure
- Retail
- Wholesale and distribution
These sectors share characteristics - high fixed costs, exposure to consumer demand, and significant input cost pressures - that make them more vulnerable.
Personal Insolvency
Personal insolvencies - bankruptcies, Individual Voluntary Arrangements, and Debt Relief Orders - have also fluctuated with the economic cycle. For individuals, rising living costs and interest rates have contributed to financial pressure.
What the Trends Mean for You
If your business is in an exposed sector, the wider trends reinforce the importance of:
- Monitoring cash flow closely
- Acting early at the first sign of difficulty
- Taking professional advice before problems become critical
Speak to a Licensed IP
If you are concerned about your business in light of wider conditions, our Manchester-based practitioners will assess your position honestly and advise on the best route - free and confidential.