For individuals, the total number of insolvencies in February 2024 was 10,136, 23% higher than in the same month in the previous year, the latest official company and individual insolvency data has revealed.
In addition, the number of registered company insolvencies in February 2024 was 2,102, 17% higher than in the same month in the previous year (1,801 in February 2023).
This was higher than levels seen while the Government support measures were in place in response to the Covid-19 pandemic, and was also higher than pre-pandemic numbers.
 Newspage asked experts for their views, which can be found below.
Reaction:
Stephen Perkins, managing director at Yellow Brick Mortgages:
“Both individual and company insolvencies are massively up on this time last year.
“So many individuals and companies are at breaking point, having exhausted all available credit and options.
“These figures paint a very bleak picture of the economy and dash hopes of a speedy recovery.
“The Bank of England needs to reduce rates sooner rather than later to provide hope to millions of individuals and businesses for their financial survival.
“The latest GDP data may show that, technically, the UK is out of recession, but the truth, as evidenced in the latest insolvency data, is that the UK economy is on its knees.”
Hannah Bashford, director at Model Financial Solutions:
“This data is deeply upsetting and just shows how out of touch the decision makers in this country are from the reality.
“Sadly, with the cost of living and interest rates remaining high, these figures are not unexpected, and I would predict we are unlikely to see a significant fall anytime soon.
“There’s still more people to come off low interest rates and many are funding their lives with unsustainable credit.”
Dariusz Karpowicz, director at Albion Financial Advice:
“The latest insolvency numbers hit like a gut punch, underscoring a brutal truth.
“With living costs skyrocketing, wages barely budging, and mortgage rates through the roof, the financial vice is tightening for many.
“February 2024’s stats throw cold water on any optimism, revealing a 23% spike in personal financial crashes and a 17% leap in business busts compared to last year.
“The surge in Debt Relief Orders and Voluntary Arrangements? A distress signal from individuals gasping for financial air. And the uptick in business liquidations and administrations?
“A grim tally of enterprises that couldn’t weather the storm. It’s a wake-up call for targeted relief, and it’s needed now.”
Charles Breen, founder at Montgomery Financial:
“Family finances fractured as the cost-of-living crisis climbed.
“Everyone’s wages apart from those of our MPs have failed to keep up with inflation so such an alarming increase in insolvencies was sadly to be expected.
“It’s a direct result of the Government and Bank of England’s incompetence.
“Why is our inflation still twice as high as France or Germany’s, forcing interest rates to remain at painful levels and pushing more and more people into hardship.
“This Government’s tone-deaf responses are driving us back to Victorian levels of poverty.”
Harps Garcha, director at Brooklyns Financial:
“With the cost of living and inflationary challenges faced by both individuals and businesses, this grim report was a given. High interest rates have not helped.
“Sadly, these numbers will continue to grow in the coming months, even though the latest GDP figures showed technically we are out of recession.
“Most consumers have exhausted any savings that were accumulated during COVID-19 and have now turned to other means of credit, which will also soon come to an end. People and businesses alike are running out of road.”
Riz Malik, Director at R3 Mortgages:
“These figures are concerning and highlight that households and businesses are still struggling with the cost-of-living crisis and economic slump we are currently in.
“This trend will continue as people exhaust their credit options especially if lenders tighten access to credit.”
Ranald Mitchell, director at Charwin Private Clients:
“The shocking 23% increase in individual insolvencies is a clear marker that many more people are not coping.
“Entering into bankruptcy, debt relief orders or IVAs is a drastic action, with these black marks sending people in to credit purgatory for many years. It is clear that the punishing economic climate has taken its toll.”
Justin Moy, managing director at EHF Mortgages:
“Increases in both personal and company insolvencies were inevitable as rates pushed higher throughout 2023, making borrowing costs significantly more expensive at a time when businesses were still suffering a Covid hangover.
“Many of the personal insolvencies will be those company owners going through company insolvencies, having no option but to relinquish their dreams of running their own business due to the increase in costs, the squeeze on tax and finance implications.
“There are more tough times ahead for us all. This feels like just the tip of the iceberg if we don’t see better support and lower rates, for small businesses in particular.”
Gary Bush, financial adviser at MortgageShop.com:
“The UK population is in a worse state than during Covid Lockdown times.
“It isn’t a good look for Rishi in the year of a General Election: households suffering under heaps of debt and yet the politicians just get awarded a pay rise. A frankly pathetic situation.”
Darryl Dhoffer, adviser at The Mortgage Expert:
“If you thought Covid-19 would be catalyst for Insolvencies, think again.
“Between the Government and The Bank Of England, their failure to tackle inflation early enough has led to these horrific insolvency figures, which makes the pandemic period look like one bad day at the office.”
Ben Perks, managing director at Orchard Financial Advisers:
“The increase in Insolvency is no surprise. We could see these figures coming a mile off and the Chancellor did very little in the Spring Budget to help business owners and Individuals with mounting debt and pressure.
“As the cost-of-living crisis gripped the nation, the burden on budgets pushed individuals and companies to breaking point.
“Fortunately, there is help and advice out there for anyone struggling.
“People must act quickly and seek advice from an Insolvency Practitioner.
“Don’t wait for Jeremy to bring in schemes to help, you could be left wanting.”
Gareth Davies, director at South Coast Mortgage Services:
“GDP data showing we are ‘out of recession’ isn’t even close to the full story.
“Take a look outside your window and you’ll see the real picture.
“Mortgage arrears climbing, unsecured debt levels climbing, insolvencies up.
“Look at how many empty retail units there are in your nearest town or village and it tells you everything.”
Austyn Johnson, founder at Mortgages For Actors:
“Both people and companies have suffered since Covid and have been working their way back to a fully profitable position.
“They really needed the slope to be shallow but with the crazy mini-Budget, the rate of inflation, and costs rising dramatically, it has been tough.
“Too tough for some and it can be beneficial, financially and mentally, to bow out if it gets too much.
“Stability over the next few years may see that struggling businesses and individuals get back into the flow of things.”
