The latest official individual and company insolvency data has been released today by The Insolvency Service.
It showed that 9,651 individuals entered insolvency in England & Wales throughout April 2024.
This was 10% higher than in March 2024 and 5% higher than in April 2023; and that the number of registered company insolvencies in England and Wales in April 2024 was 2,177, 18% higher than in March 2024 (1,838) and 18% higher than the same month in the previous year (1,838 in April 2023).
Numbers of company insolvencies also remained much higher than those seen both during the COVID-19 pandemic and between 2014 and 2019.
Newspage asked experts for their views, below.
Reaction:
Ben Perks, managing director at Orchard Financial Advisers:
“More grim reading and yet more evidence that the UK economy is on the brink.
“This week we have seen unemployment up, credit card balances up and now insolvencies up. It doesn’t paint the prettiest of pictures for our economy.
“This will spark calls for a General Election sooner rather than later. Let’s hope the Bank of England reads this report and cuts rates at the next meeting.”
Riz Malik, director at R3 Mortgages:
“More dire data emerging from the UK economy. More businesses will fall by the wayside while this Government pats itself on the back for being out of recession.
“Was this part of Rishi and Jeremy’s plan? If so, it does not seem to be working.
“There is little support for businesses from the current administration and Covid, the economic downturn as well as Brexit have clearly taken their toll on many.”
Dariusz Karpowicz, director at Albion Financial Advice:
“This is more than worrying. The 10% rise in individual insolvencies eerily matches the 10% increase in credit card balances over the past year, according to the latest figures from UK Finance.
“With 9,651 individuals entering insolvency in April 2024, and company insolvencies up 18% from the previous month and the same period last year, the financial pressure people and businesses are under is clear for all to see.
“These numbers are a stark reminder of the economic strain the UK economy is experiencing. I predict these figures will continue to rise if the Bank of England maintains high interest rates, exacerbating the already challenging financial environment.”
Michelle Lawson, director at Lawson Financial:
“This data makes for sad and upsetting reading and says all you need to know about the higher interest rate environment and cost of living crisis.
“It’s yet more proof that people and businesses are struggling.
“Good businesses that were once viable are closing their doors due to spiralling costs and reduced demand as consumers feel the pressure.
“This knocks on to unemployment and then to the personal finances of these individuals. We need action sooner rather than later to turn things around.”
Stephen Perkins, managing director at Yellow Brick Mortgages:
“With costs for businesses continuing to soar from inflation and wage growth, yet many remaining under pressure to keep prices for their goods and services competitive, a growing number of companies have simply run out of road.
“Many would have borrowed and done everything they can to weather the storm, but when the waves keep coming eventually the boat capsizes.
“This is the tidal wave from the pandemic and the cost-of-living crisis finally reaching the shore, and sadly there are likely to be more company closures as the year progresses.
“Urgent action is needed from the Bank of England and the government to calm the waters for businesses across the UK. But when will it come?”
Justin Moy, managing director at EHF Mortgages:
“Alarming insolvency data again highlights the financial pressure that higher interest rates have caused throughout personal and business finances.
“Many of the corporate insolvencies will be to write-off Bounce Back finance, taken on the basis that the borrowing will be covered off by the improvement in the economy that never materialised.
“For most smaller businesses, the financial struggle over the last four years has seen many owners just give up and look for an employed role, and actually earn more as a result.”
Simon Bridgland, broker and director at Release Freedom:
“Much of the insolvency figures will come from small family businesses, with budgets operating in just the same way as household budgets, and in just the same way they too have been feeling the pinch of little or no cashflow.
“However, the stresses that small business struggle with will of course also be felt further up the food chain in larger companies.
“Pressures from wage bills and other operational cost are all having an impact on margins which are already tight as hell in many industries, causing some to be driven out of business regardless of size.”
