R3 responds to February 2023 insolvency statistics

14 March 2023

• Corporate insolvencies increased by 6% in February 2023 to a total of 1,783 compared to January's total of 1,682, and increased by 17.5% compared to February 2022's figure of 1,518. 
  • Corporate insolvencies also increased by 160.3% from February 2021's total of 685 and by 32.6% from February 2020's total of 1,345.
• Personal insolvencies increased by 5.9% in February 2023 to a total of 8,210 compared to January's total of 7,750, and decreased by 16.5% compared to February 2022's figure of 9,838.
  • Personal insolvencies also increased by 20% from February 2021's total of 6,839 and decreased by 4.4% from February 2020's total of 8,590.

Nicky Fisher, Vice President of R3, the insolvency and restructuring trade body, responds to today's publication of the February 2023 corporate and individual insolvency statistics for England and Wales:

“Corporate insolvency numbers are at their highest level in four years due a rise in Creditors’ Voluntary Liquidations. Numbers for this process are higher than in 2022, 2021, 2020 and 2019 as more and more directors are choosing to close their businesses.

“After nearly three years of lockdowns, supply chain issues, rising costs and falling revenues, many business owners have simply had enough, and are shutting up shop before they are forced to.

“Trading conditions remain tough for many businesses in England and Wales – and it seems like the traditional Christmas and New Year trading period didn’t give them the boost they needed to survive. 

“People are still very worried about money and the economy, and are reluctant to spend on anything other than the basics, while at the same time the costs of energy, fuel and wages continue to be a major concern for businesses.

“Now is the time for directors to be aware of the signs their businesses are struggling and to seek advice if they show themselves. Cashflow issues, payment delays and rising stock are all signs a business is distressed and the earlier directors seek advice, the more options they have open to address the issues they face.

Personal insolvencies

“When it comes to personal insolvencies, the figures published today are higher than January’s, and this is due to an increase in the number of people entering an Individual Voluntary Arrangement or a Debt Relief Order.

It’s also worth noting that the personal insolvency figures published today are higher than the ones for February 2020 and 2019, although they are lower than February 2022’s.

“Money worries are a reality for many people at the moment. Inflation continues to take its toll, and whilst the winter may have been weathered by many the squeeze on household finances continues to weigh heavy on people’s minds.

“Many households may have relied on savings or low-level credit to help them absorb high inflation, but with energy and food prices unlikely to fall to pre-2022 inflation levels in the next two or three years, pressure on personal finances will remain a concern for many.

“It can only take one financial shock – a missed payment, reduction in hours at work or illness – to mean people whose finances are tight become insolvent, as debts they were struggling with but managing to pay become unpayable.

“We urge anyone who is worried about money to be brave and seek advice from a qualified source. It’s incredibly hard to talk about your financial worries or problems, but the earlier you do, the more options you have open to you, and the more time you have to take a decision about your next step.

“Most R3 members will offer a free consultation to potential clients to help them understand more about their situation and outline the options open to them for resolving it.”