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Insolvency statistics December 22

ended 17. January 2023

Tomorrow morning at 09:30, we're getting the latest official insolvency data for December, for both companies and individuals. Selection of Qs (just answer the first two or the second two, not all four):

  • Are you seeing more people defaulting on their debts and being forced into IVAs, DROs or bankruptcy (or perhaps consolidating their debts via secured loans to keep their heads above water)?
  • Do you expect the number of people in serious financial difficulty to grow in 2023 due to the cost of living crisis and higher mortgage payments?
  • Are you seeing more companies entering administration, CVAs or deciding to call it a day as they simply aren't profitable in the current climate? 
  • What are the main challenges businesses that are struggling face right now, and what are you advising them to do to survive or ride out 2023? Generically, as clearly every case is different.

4 responses from the Newspage community

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Ian Hepworth
Director at Funding Solutions UK Limited
In our experience, more businesses are throwing in the towel. Zombie businesses have been limping along for many years. The banks made a point of supporting businesses through Covid and beyond in an attempt to right their wrongs from the financial crisis a decade before. However, they are now withdrawing support. Businesses are facing HMRC arrears that need repaying, increasing energy bills, supply chain disruption, less supplier credit, Government-backed loans that now need repaying and a business finance market that is perhaps struggling to offer more funding. It is a perfect storm that some businesses sadly can no longer weather.
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Mark Grant
Business Finance Adviser at The Business Finance Branch
In the fourth quarter of 2022 and into 2023, we have seen an increase in businesses fearing that administration may become an inevitability, as their cash flow position has deteriorated so seriously over that period.
Instead of just not being profitable, they are in some cases just out of cash and not able to meet the fixed overheads and staff costs that enable them to operate. Businesses that can smooth out cash flow and remove the large, one-off cash calls in favour of lesser, but more regular income and outgoings will stand a better chance of riding out the current economic headwinds. We are talking to clients about trying to get ahead of their situation, and to do just that if possible.
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Ed Rimmer
CEO at Time Finance
Many firms are already in financial distress and struggling to make ends meet. Insolvencies will continue to climb in 2023 as the strain to keep up with the day-to-day costs of running a business mounts. When otherwise viable businesses are hit by rising costs and forced to close, our economic recovery suffers. What's encouraging is to see more businesses seeking financial assistance to free up working capital and relieve cash flow pressure. This will be a crucial solution if businesses are to overcome the challenges that 2023 will continue to throw at them.
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Marcus Wright
Managing Director at Bolton Business Finance
Sadly we are seeing an increase in businesses with large amounts of short-term borrowing, which have run out of road. Energy bills in particular are hitting businesses seriously hard in some sectors like restaurants and hospitality. And though many have been protected by fixed contracts, they are now expiring. Add into that inflation and a less forgiving HMRC, it means we will see far higher insolvencies this year. 2023 is shaping up to be a year to forget.