R3 responds to September 2022 insolvency statistics

14 October 2022

• Corporate insolvencies decreased by 13.5% in September 2022 to a total of 1,679 compared to August's total of 1,940, and increased by 15.6% compared to September 2021's figure of 1,453.
  • Corporate insolvency figures were also 11.3% higher than September 2019’s figures of 1,508.
• Personal insolvencies increased by 4.5% to 10,013 in September 2022 compared to 9,584 in August, and were 0.5% higher than September 2021's figure of 9,967.
  • Personal insolvencies also decreased 18.5% from September 2019's total of 12,280.

Christina Fitzgerald, President of R3, the insolvency and restructuring trade body, responds to today's publication of the September 2022 corporate and individual insolvency statistics for England and Wales:

“The corporate insolvency figures published today provide a clear insight into insolvencies before, during, and after the pandemic.

“The monthly fall in corporate insolvencies is due to a drop in Creditors’ Voluntary Liquidations, while the year-on-year increase has mainly been caused by a rise in Compulsory Liquidations, which is likely to be due to the end of legislation around winding-up petitions.

“The increase in corporate insolvencies between September 2022 and September 2019, on the other hand, is due to a significant increase in the number of Creditors’ Voluntary Liquidations.

“This is likely to be due to the triple whammy of the withdrawal of Covid support, the economic turbulence, and the challenging business climate resulting in directors feeling that they are unable to continue and choosing to close their businesses before that choice is taken away from them.

“Businesses have been operating against a backdrop of real uncertainty in recent weeks and months. A volatile pound, a decline in consumer confidence and lower household spending have led to weaker economic growth, and it seems likely that these conditions will get worse before they get better.

“With living costs rising, both business owners and employees are under significant financial strain as rising costs have meant rising salary demands and increasing pressure on margins, which some businesses haven’t, unfortunately, been able to meet.

“Sky-rocketing energy bills are also a major challenge. While the recently announced emergency support package will go some way towards mitigating these concerns, it may not provide enough of a safety net.

“When it comes to personal insolvency, the monthly increase has mainly been caused by a rise in the Individual Voluntary Arrangement (IVA) numbers, which suggests that the issues around the cost of living are causing more people to seek help with managing their debts.

“The past couple of years have been extremely tough on many people’s personal finances and household budgets are significantly more stretched than they were a year ago.

“The rise in the cost of living is showing no sign of slowing down, real wages have fallen, and more and more people are being forced to borrow money to pay their bills.

“We understand that it is difficult to take that first step and talk to someone about your finances, but discussing your concerns about your business or your personal finances with a qualified professional as early as you can will mean you’ll have more time and more options to resolve your situation than if you’d waited.

“Most R3 members offer a free initial consultation to business owners or individuals so they can understand their situation and outline the options that are available to help them move forward."