The number of company insolvencies in November 2023 was 21% higher than the number in November 2022, according to the latest data from The Insolvency Service’s Monthly Insolvency Statistics report for November 2023.
The report found that approximately 2,466 companies registered for insolvency throughout the month.
This was higher than levels seen while the Government support measures were in place in response to the coronavirus (Covid-19) pandemic and also higher than pre-pandemic numbers.
The company insolvencies consisted of 359 compulsory liquidations, 1,962 creditors’ voluntary liquidations (CVLs), 133 administrations and 12 company voluntary arrangements (CVAs).
The increase in company insolvencies compared to November 2022 was driven by CVLs and compulsory liquidation numbers, while administration numbers remained similar to November 2022 at slightly less than 2019 levels.
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Ranald Mitchell, director at Norwich-based Charwin Private Clients:
“The pressure on UK households and businesses is accelerating as high interest rates, the ongoing cost-of-living crisis, crippling energy prices and inflation continue to wreak havoc in the economy.
“If the Bank of England plans to break it to make it, they are certainly getting the first part right.
“Economic data is slumping, households are not coping and more and more businesses are struggling to stay afloat.
“With circa 1.4 million UK households coming off ultra-low fixed rate mortgages next year, the consumer data can only get worse.
“This cannot continue and the Bank of England needs to consider cutting interest rates at the first available opportunity, providing some respite for the millions who of people and businesses who are not managing through this period.”
Stephen Perkins, managing director at Norwich-based Yellow Brick Mortgages:
“The latest insolvency data shows the continued pressure on businesses and households in every corner of the UK.
“With inflation still pushing up prices and many seeing their mortgage or rent payments increase, savings, cut-backs and using available credit can only help so much before ultimately the budget breaks.
“The fact DROs in November 2023 were 45% higher than in November 2022 shows the strain people are under.
“With over 1.4 million more mortgages coming off low-rate deals in 2024, the situation will get a lot worse before it gets better.
“It is also a similar picture for businesses with increased costs, reduced demand from embattled consumers, the economy contracting and increased taxation all beating down on them.”
Justin Moy, managing director at EHF Mortgages:
“In isolation, increased mortgage costs are enough to affect most families severely, but when you also include the likes of fuel price hikes, car insurance premiums and food inflation, the overall impact is huge and driving many towards one of the many debt options simply to survive.
“As we move into 2024 and with over one million extra borrowers about to feel the pain of significantly higher mortgage payments, these insolvency figures will become worse before they improve.”
Gary Bush, director at Potters Bar-based broker, MortgageShop.com:
“People and businesses in the UK have been through a number of major shocks in recent years, from Covid and the cost-of-living crisis to a significantly higher interest rate environment.
“With the economy contracting in October, there is every chance things will get worse before they get better in 2024.”
Simon Bridgland, broker and director at Canterbury-based broker, Release Freedom:
“For the 1.4 million borrowers that are still on ultra-low fixed rate mortgages, the clock is very much in countdown mode.
“The real problem that I have seen is that, while incredibly low mortgage rates were stress-tested as affordable on the much higher rates we have today, people have taken out further unsecured credit for perhaps a new car or the odd holiday.
“In an ultra-low interest rate environment, this isn’t that hard to manage for those on a solid income.
“However, now that rates have increased I am seeing some people really struggle to manage their monthly payments, with several getting into difficulty and missing the odd payment.
“These are people who historically would never have missed a beat. I’ve seen it due to rate rises but also a lack of company bonuses being paid as businesses also feel the pain.”
Rhys Schofield, brand director at Derby-based Peak Mortgages and Protection:
“Yes, inflation is looking better but we aren’t out of the woods yet.
“The economy is showing signs of a worrying slowdown, the UK continues to lag behind the rest of the developed world in productivity per worker, and households are dealing with everything getting more and more expensive year on year.
“It feels that the storm is still brewing. The fact that three members of the Monetary Policy Committee voted to raise rates yesterday goes to show how out of touch policymakers are with the reality faced by normal people and businesses.”
