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The number of registered company insolvencies in England and Wales in May was 6% lower at 2,006 than the month prior, and 21% lower than the same month in the previous year after seasonal adjustments, new government statistics show.
Despite this, the number of company insolvencies still remained much higher than those seen both during the pandemic and between 2014 and 2019.
Company insolvencies in May consisted of 271 compulsory liquidations, 1,590 creditors’ voluntary liquidations, 126 administrations and 19 company voluntary arrangements.
The numbers of CVLs and administrations were lower than in both May 2023 and April 2024, while the number of compulsory liquidations was lower than in May 2023 but higher than in April 2024 .
One in 180 companies on Companies House effective register – at a rate of 55.6 per 10,000 companies – entered insolvency between 1 June 2023 and 31 May 2024. This was an increase from the 54.2 per 10,000 companies that entered insolvency in the 12 months ending 31 May 2023.
While the insolvency rate has increased since the lows seen in 2020 and 2021, it remains much lower than the peak of 113.1 per 10,000 companies seen during the 2008-09 recession.
The government has attributed this to the number of companies on the effective register having more than doubled over this period.
Simon Michaels, CEO of HW Fisher Business Solutions, said: “The number of company insolvencies should ring alarm bells – yet we’ve seen little action to help small businesses survive the UK’s current high interest rate environment. We need fresh measures to support SMEs, starting with addressing their cash flow challenges. One option is a new payment initiative for large companies and government agencies to guarantee faster payments for SMEs.
“A recent Treasury Committee report revealed how banks are mistreating small businesses. In the last year more than 140,000 have been ‘de-banked’. Loan approval rates are falling drastically, and more business owners are being forced to use their personal assets as collateral.”
He added: “Instead of turning their backs on businesses in their time of need, we need to see more government backed schemes that ensure fair access to low-interest loans for SMEs. Otherwise, the incentive for entrepreneurs to start their own business will quickly disappear.”
