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Insolvency data shows "a pressing need to address the immediate challenges faced by struggling individuals and small businesses"

ended 20. September 2024

The Insolvency Service has just published the latest company and individual insolvency data for August. Among other things, it showed that, after seasonal adjustment, 10,000 individuals entered insolvency in England and Wales in August 2024. This was 5% lower than in July 2024, but 16% higher than in August 2023; and that after seasonal adjustment, 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 (2,286 in August 2023). However, the number of company insolvencies remained much higher than those seen both during the COVID-19 pandemic and between 2014 and 2019. Newspage asked experts for their views, below.

2 responses from the Newspage community

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Editor
Gabriel McKeownVerified
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
Despite the slight reprieve in UK insolvencies in August, the underlying economic pressures remain acute. The latest data paints a complex picture of financial distress across businesses and individuals. While the dip in insolvencies offers hope, the numbers remain stubbornly high compared to historical norms, indicating persistent economic headwinds. The composition of corporate insolvencies reveals interesting trends, CVLs continue to dominate, suggesting many business owners are proactively winding up operations rather than facing forced closures. Additionally, there is a standout trend in DROs, with August marking the fifth consecutive month of record-high numbers, signalling deepening financial troubles for a significant portion of the population. Looking ahead, the economic outlook remains uncertain, and as the new government prepares its first budget in October, there is a pressing need to address the immediate challenges faced by struggling individuals and small businesses.
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Editor
Simon BridglandVerified
Director at Charwin Private Clients
Sobering figures again from the Insolvency Service, with a significant uptick compared to a year earlier. Increasing personal debt will continue to cause problems as household budgets remain at breaking point for many. The removal of the admin fee on DRO’s will of course attract those in need of help as it does away with a barrier that would have added to the issue. The trouble is for DRO’s and IVA’s the user of such vehicles will remain financially outcast from seemingly fair credit terms for many years to come. Filing for bankruptcy could seem a faster route to normality for many, although again its years before they get there. Company insolvencies are equally as devastating for the owners of the business, however the impact of these is often felt in the wider community as it means employees are let go, potentially catching them in a net of financial woe at the same time.