Figures released by the Insolvency Service show that business insolvencies across England and Wales rose by 18.7% in November 2021 to a total of 1,674, in comparison to 1,410 in October 2021. This represents a sharp 87.4% increase to the relatively low figure of 891 in November 2020.
This is the first time since the pandemic that monthly registered company insolvency levels have crept so high, driven by the increasing number of creditors’ voluntary liquidations (CVL) to the greatest number in over two years. This increase suggests that a rising number of company directors are choosing to close their businesses, possibly because they feel survival is impossible in the present climate.
November 2021 saw 1,421 CVL’s, a substantial gain of 43% on 2019 figures. Other types of company insolvencies remained at a similarly seen level in November, with 50 compulsory liquidations, which is 32% higher than 2020 but 82% lower than 2019. Notably two new procedures created by the Corporate Insolvency and Governance Act 2020 led to 15 moratoriums being obtained and 10 companies registering a restructuring plan at Companies House between 26 June 2020 and 30 November 2021, in England & Wales,
Commenting on these figures Christina Fitzgerald, Vice President of insolvency and restructuring trade body R3 noted, “Times are tough for businesses in England and Wales as the pandemic continues to take its toll on the economy and the firms that drive it. Businesses have been hit by the triple whammy of increased costs, supply chain issues and rising Covid-19 cases. They have also been operating in the face of low consumer confidence and anaemic economic growth in recent months, which, coupled with an increasingly difficult Covid situation, has led to changes in people’s shopping and spending habits and taken its toll on revenue levels”.
Cogent Consult encourage any director who is worried about their business to seek advice as soon as possible. Doing so at an early stage provides increased options, more time and potentially better outcomes for businesses than further delaying decision-making. Potential new clients can benefit from a free, no-obligation consultation with an experienced expert to fully understand the situation they are in and to investigate real world solutions for the future.