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R3 responds to January 2024 insolvency figures

R3 responds to January 2024 insolvency figures

16 February 2024

  • Corporate insolvencies decreased by 11.8% in January 2024 to a total of 1,769 compared to December 2023's total of 2,005, and increased by 5% compared to January 2023's figure of 1,685. 
    • Corporate insolvencies increased by 12.9% from January 2022's total of 1,567 and by 2.5% when compared to pre-pandemic levels in January 2019 (1,726).
  • Personal insolvencies increased by 22.8% in January 2024 to a total of 8,089 compared to December 2023's total of 6,585, and increased by 4.3% compared to January 2023's figure of 7,756. 
    • Personal insolvencies decreased by 4.7% from January 2022's total of 8,485 and decreased by 17% when compared to pre-pandemic levels in January 2019 (9,748).

Nicky Fisher, President of R3, the UK’s insolvency and restructuring trade body, comments on the publication of the January 2024 personal and corporate insolvency statistics for England and Wales:

“January 2024 saw the highest corporate insolvency figures for the month of January in four years. Both compulsory liquidation and Creditors’ Voluntary Liquidation (CVL) levels were higher than in January 2019, which suggests that both creditor pressure and director fatigue are still above pre-pandemic levels. 

“Levels of corporate insolvency were lower than in December due to a fall in the number of CVLs, but compulsory liquidations returned to their second highest level in four years. Creditors are clearly proactively pursuing the debts they are owed as we go into the final quarter of the financial year, and they look to balance their own books and pay their own debts.

“January was the sting in the tail of a hard year for businesses. The post-Christmas boost many were hoping for didn’t happen as people remained conscious of the costs of food, fuel and energy, and held back on spending on anything that wasn’t essential, while running costs for businesses remained high and margins remained thin.

“As a result, many firms who were struggling missed out on the lifeline or windfall they were hoping for from the Christmas trading period, and if the business climate doesn’t improve and the recession takes root, we may see corporate insolvency numbers increase further in future.

“Personal insolvency numbers rose month-on-month and year-on-year, with numbers increasing for every personal insolvency process compared to December 2023, and a rise in Debt Relief Orders and Bankruptcies and a fall in Individual Voluntary Arrangement numbers compared to January 2023.

“This suggests that there is a short-term increase in demand for all kinds of personal insolvency support, and that more people are looking for support with higher levels of personal debt than last year, due to the increase in DRO and Bankruptcy levels compared to January 2023’s figures.

“Breathing Space numbers also soared to the highest levels since the process was introduced in May 2021, which potentially indicates an increased need for a break from creditor pressure following the festive period, but what this means for personal insolvency levels in the short and long-term remains to be seen.

“We know January is traditionally a tough month for consumers – and this was no exception. Christmas came at the end of a year of increased expenses, and the outgoings associated with it may have been the tipping point for those who had been scraping by until then.

“Food, fuel, housing and energy costs remain high – as they have for a long time now – and remain key concerns for many households. If costs continue to rise, and this isn’t matched by an increase in wages, we could see personal insolvency numbers rise over the course of this year. 

“Our message to anyone who is worried about their personal or business finances is to seek advice as soon as possible. It’s such a hard conversation to have, but the sooner you take that step, the sooner you’ll understand what options are available to you for addressing it – and the earlier you have this conversation, the more time you’ll have to consider your next move.

“Most R3 members will give a free consultation to prospective clients so they can understand more about their circumstances and outline which options may be best suited to them.”

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Stuart McBride
Stuart McBride
020 7566 4214
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