August company insolvencies fall 9% to 1,953

The number of registered company insolvencies in England and Wales was 1,953 in August 2024, 9% lower than in July 2024 (2,144) and 15% lower than the same month in the previous year, according to the latest figures from the Insolvency Service. 

Company insolvencies in August 2024 consisted of 279 compulsory liquidations, 1,542 creditors’ voluntary liquidations (CVLs), 112 administrations and 20 company voluntary arrangements (CVAs). All types of company insolvency were lower than in July 2024.

One in 180 companies on the Companies House effective register entered insolvency between 1 September 2023 and 31 August 2024. This was a slight increase from the 55.4 per 10,000 companies that entered insolvency in the 12 months ending 31 August 2023. 

Insolvency rates are calculated on a 12-month rolling basis as a proportion of the total number of companies on the effective register. The 12-month rolling rates show longer term trends and reduce the volatility associated with estimates based on single months.

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. This is because the number of companies on the effective register has more than doubled over this period.

Commenting on the figures, David Meldrum, insolvency practitioner at Azets said: “These figures are not surprising given the economic headwinds businesses have been contending with. High interest rates, inflationary pressures, and tightened credit conditions continue to push companies, particularly SMEs, into financial distress. The August 2024 numbers are reflective of these harsh realities, particularly in sectors like retail, construction, and hospitality, which have been hit hardest.

“The long-term trend shows that corporate insolvencies have been steadily increasing since 2022, exacerbated by the withdrawal of government support measures post-pandemic. Many businesses that survived during that period, with the help of loans and grants, are now facing reality as those financial cushions have evaporated.”

He added: “As we look forward, the pressure on businesses is unlikely to ease in the near future. The Bank of England has held interest rates at 5%, and an increasingly cautious consumer market means that we may continue to see elevated insolvency levels into the rest of 2024 and beyond. That said, for businesses that act early and engage with licensed insolvency practitioners, there are paths to recovery.

“Liquidation is often the last resort. However, administration can be a lifeline for companies when tackled early enough. In many cases, administrations allow businesses to restructure and emerge stronger. Engaging with a licensed insolvency practitioner early on provides business owners with the best chance of survival and, in some cases, growth. Too often, companies wait until it’s too late to explore options beyond liquidation.”