R3 responds to April 2023 insolvency statistics

16 May 2023

• Corporate insolvencies decreased by 31.8% in April 2023 to a total of 1,685 compared to March's total of 2,471, and decreased by 15.2% compared to April 2022's figure of 1,988. 
  • Corporate insolvencies increased by 82.2% from April 2021's total of 925 and by 18.2% from pre-pandemic levels in April 2019 (1,426).

• Personal insolvencies decreased by 21.4% in April 2023 to a total of 8,996 compared to March's total of 11,447, and decreased by 8.1% compared to April 2022's figure of 9,790. 
  • Personal insolvencies decreased by 8.9% from April 2021's total of 9,873 and decreased by 7.1% from pre-pandemic levels in April 2019 (9,685).

Nicky Fisher, President of R3, the insolvency and restructuring trade body, responds to the publication of the April 2023 personal and corporate insolvency statistics for England and Wales:

“Despite the monthly fall in corporate insolvency figures, total numbers are still above pre-pandemic levels, and the key reason for this is that Creditors’ Voluntary Liquidations are higher than they were in 2019.

“After three years of disturbed trading and a choppy economy, it’s clear that directors have simply had enough or have realised the time is right to shut down their business while the choice is still theirs to make.

“The business climate is still tough. Firms right across the supply chain are trying to manage increased costs without passing this on to their customers, and with inflation remaining sticky, this is likely to become ever more challenging as the year progresses.

“We are also waiting to see the real impact of rising interest rates – and may not see the cumulative impact of the rate rises until later in the year as fixed term credit arrangements come to an end. Businesses could potentially face a credit cost shock just as inflation is predicted to ease, and could mean we’re looking at a one-step forward, one-step back situation, rather than a sustained improvement in the trading climate.

“Given this, and the ongoing challenges businesses face, we urge directors to remain vigilant and act if they see any signs it might be distressed, or if they start to worry about it or its financial health.

“When it comes to personal insolvencies, the monthly and yearly drop in the figures we’ve seen today has been driven by a reduction in numbers for all forms of personal insolvency process, but notably in Individual Voluntary Arrangements (IVAs) and Debt Relief Orders (DROs).

“However, we must treat the fall we’ve seen in the personal insolvency figures published today with some caution as they will reflect a changing debt solutions market where options for individuals might not be as readily available as they might be, and there could be a backlog of cases building up as a result.

“Money worries remain a key concern for many people across England and Wales. The costs of energy and food remain a serious challenge, people are borrowing more and more as they attempt to cover their expenses, and are cautious about spending money on anything that isn’t essential.

“Our advice to anyone who is worried about their finances – whether business or personal –  is to be brave and seek advice from a qualified source. It’s a far from easy conversation to have, but it will give you an idea of potential solutions that are available, and the earlier you have it, the more time you have to take a decision about how you move forward.

“Most R3 members will give a free consultation to those who are worried about their or their business’s finances, to help understand more about their situation and outline the potential options for resolving it."