- There were 23,872 seasonally adjusted corporate insolvencies in 2024. This was a decrease of 5.1% from 2023’s figure of 25,163, and an increase of 7.9% on 2022’s figure of 22,129.
- There were 117,947 seasonally adjusted personal insolvencies in 2024. This was an increase of 14% on 2023’s figure of 103,434, and a slight fall of 0.7% on 2022’s figure of 118,752.
Fran Henshaw, North West Chair of R3, the UK’s insolvency and restructuring trade body, says:
“Although corporate insolvencies fell in 2024 compared to 2023, they remain higher than in 2022 and well above pre-pandemic levels. Compulsory liquidation levels have increased compared to last year as creditors pursue the debts they are owed in an effort to balance their own books, and while Creditors’ Voluntary Liquidation numbers have declined compared to 2023, they are higher than in 2022 and the years before and during the pandemic as a high volume of directors close their businesses now while the decision to do so still rests in their hands.
“2024’s insolvencies have been driven by another year of high costs and a series of political, economic and geopolitical events which have taken a toll on businesses in England and Wales. Members have told us that the Election, the Budget and the conflict in the Middle East have all led to increases in enquiries and requests for advice and support, and this reflects how these unexpected shocks can be and have been the tipping point for many businesses after years of battling harsh trading conditions.
“From a sectoral perspective, retail, hospitality and construction have all suffered this year. All three of these industries have been hit hard by continued rises in expenses, while retail and hospitality have been affected by cautious consumer spending over the past 12 months, and construction by bad weather and the delay to project starts and commissions caused by the General Election.
“These sectors are going to be some of the most affected by the Chancellor’s planned increases in Minimum Wage, Living Wage and Employers’ National Insurance Contributions. Although it’s likely we won’t see the impact of these on corporate insolvency figures until the end of the first or possibly the middle of the second quarter of next year, the prospect of their introduction is already causing concern for businesses right across the economy.
“Restructuring Plans have been a major and consistent topic of conversation in the profession this year. The Tasty plc ruling in May opened up this process to mid-market firms, and since it was made we’ve seen a number of recognisable names enter one in an attempt to resolve their financial issues. The challenge the profession faces is making Restructuring Plans accessible to the SME market – and given the positive impact this could have on local communities and supply chains by keeping viable SMEs open, I hope it can be achieved this year.”
Fran, who is Head of Corporate Recovery and Insolvency at Beever and Struthers, continues: “Turning to personal insolvencies, numbers have been higher this year than in 2023 and this sadly reflects the ongoing toll the cost of living is taking on people in England and Wales. Financial worries have been a reality for many people for some time as the rising costs of food, energy and inflation mean their money doesn’t go as far as it used to, and the ongoing increases in costs are resulting in more people turning to a personal insolvency process to help resolve their financial issues. With a number of retailers reportedly planning price increases to cover increased outgoings, ongoing inflation, and the Energy Price Cap rising from this month, it’s set to be another hard year for household finances.
“It's worth noting that the make-up of personal insolvencies has changed over the last two years – and this is mainly a result of changes in legislation. The increase in the DRO threshold and removal of the entry fee this year have meant 2024 was a record year in terms of the number of people entering this process, Individual Voluntary Arrangement numbers have increased compared to last year, and Bankruptcy levels have more than halved from what they were in 2019. A decline in Bankruptcy numbers may seem positive, but the total personal insolvency figures and the high number of people entering a Breathing Space in 2024 show that there continues to be a real and serious issue with personal debt in England and Wales.
“My message to anyone in the North West who is worried about money is to seek advice as soon as possible. We’ve seen countless examples of people and businesses who have come for advice too late and who could have achieved a different – more positive – outcome if they had reached out sooner. We know it’s a very hard conversation to have, let alone start, but talking about your money worries with a qualified advisor when these worries are at an early stage gives you more options and more time to think about your next step.
“Most R3 members in the North West will give prospective clients a free consultation to learn more about their situation and outline the potential options open to them to improve it.”