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2023 company insolvencies highest since 1993

ended 30. January 2024

The Insolvency Service has just published data showing that, in 2023, the number of company insolvencies was the highest annual number since 1993. Key points below, full report >> here <<. Newspage asked experts and small business owners for their views, bottom.

  • In 2023, there were 25,158 registered company insolvencies, comprising 20,577 creditors’ voluntary liquidations (CVLs), 2,827 compulsory liquidations, 1,567 administrations, 185 company voluntary arrangements (CVAs) and two receivership appointments. The number of company insolvencies was the highest annual number since 1993.
  • CVLs increased by 9% from 2022 to a new record high number in the time series going back to 1960. Numbers of compulsory liquidations (up 44%), administrations (up 27%) and CVAs (up 67%) were also all higher than in 2022.
  • One in 186 active companies (at a rate of 53.7 per 10,000 active companies) entered insolvent liquidation in 2023. This was an increase from the 49.6 per 10,000 active companies that entered liquidation in 2022. The rate in 2023 was the highest level since Q3 2014. Although company insolvency volumes were at a 30-year high in 2023, the number of companies on the Companies House register has increased over time, so the 2023 rate remained much lower than the peak rate of 94.8 insolvencies per 10,000 active companies during the 2008/09 recession.

8 responses from the Newspage community

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Michelle Lawson
Director at Lawson Financial
These are some really sad stats. Some viable and popular businesses have been forced to close due to spiralling costs and burdening taxes. This really isn’t a legacy that the Government should be proud of, especially one that is supposed to champion business and entrepreneurship.
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Ben Perks
Managing Director at Orchard Financial Advisers
As a business owner, it's difficult to think of an overhead that didn't increase in 2023. So it is not surprising to see businesses have suffered and insolvencies are rising. The rise in CVLs is particularly concerning as these proceedings are triggered by the owners of the business. It shows a pattern of people that have exhausted all options and been left with nowhere left to turn. There will be a vast array of reasons for business closures, and not all of them doom and gloom, but it doesn't make for good reading. When a company enters into insolvency proceedings, it can often mean redundancies and debts to neighbouring businesses, so what is particularly sad about these figures is what is not reported; the negative impact to communities and other small businesses. Engaging with an Insolvency Practitioner early can be a positive move and lead to avoiding proceedings, but these figures do highlight a need for additional support for businesses and the government should take action.
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Rob Cossins
Co-founder & CEO at Scribe
The economic environment is tough and it's clear that we need growth. We're at a sharp turning point in the UK. Following a record number of companies created in recent years, we're seeing more failing amid harsh economic conditions and uncertainty. That said, companies that weather the current storm will emerge stronger and we do see many pockets of growth in the data.
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Gary Bush
Financial Adviser at MortgageShop.com
Sad but expected news that the UK's companies are suffering from insolvencies at the highest annual number since 1993. The problem in most of these cases is that their bankers are currently going through a process of removing valuable overdraft facilities, which these companies have had to lean on, at a time when they most need them. The government needs to warn the banks that to stress companies at this time is foolish and indeed pointless, recovering from the lockdowns has been a very painful process for a lot of business owners, a lot of whom received absolutely no money from the government to support their businesses or their families. Pressurising businesses, adding undue stress, and removing borrowing facilities will lead to widespread insolvencies, which leads to the banks often recovering none of their monies, a foolish practice. Any business owner suffering from monetary pressures should seek advice from a regulated debt counsellor as soon as possible to defend themselves.
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Justin Moy
Managing Director at EHF Mortgages
This is a terrible indictment of the UK economy and the way it has been handled, over the past few years in particular. Many were encouraged to borrow out of Covid at a time when we didn't know what the future had for us, and many of those affected will be scarred by that experience for many years to come. With the cost of running a business spiralling, business rates crippling larger firms, and the amount of tax due for those who make a bit of profit, the popularity of self-employment is waning.
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Darryl Dhoffer
Founder at The Mortgage Geezer
Creditors Voluntary Liquidations, the most frequent type of insolvency, rose by a significant 9% to a record high, suggesting finacial stress was widespread across businesses. Both small and large companies are having difficulties with restructuring or debt arrangements, which is rising and is alarming. Although high, the liquidation rate remains significantly lower than the peak during the 2008/09 recession, which suggests there is some resilience in the overall business landscape. Monitoring trends in 2024 will be essential to assess whether this is a temporary blip or a sign of more fundamental issues.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
There are no surpises in this data as 2023 was an incredibly challenging year for many business sectors and companies, particularly those on the high street. With high business rates, rising staffing costs, increasing costs of stock and the squeeze on household finances leading to many cutting back on all but necessary spending, the economy is under pressure. There is hope 2024 could see a small recovery if inflation is finally brought under control but clearly this will be too late for many businesses based on this report.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
This data shows the tremendous negative impact rate rises have had on the economy, with high finance costs for business and lower demand as customers folk out more on thier mortgage payments. Things are only going to get worse, despite the hault in further rises, as customers come off their fixed rates in 2024. The governement and Bank of England need to think about how they will stimulate the economy this year or else it will sleep walk into a housing crisis.