In 2023, 25,158 company insolvencies were reported in England and Wales by the Insolvency Service, the highest number since 1993.
Figures included 20,577 voluntary liquidations (9% higher than 2022 and the highest number since 1960), 2,827 compulsory liquidations (up 44%), 1,567 administrations (up 27%), and 185 company voluntary arrangements (CVAs) (up 67%).
The number of compulsory liquidations increased to levels last seen before the coronavirus pandemic.
Insolvencies rose to 53.7 per 10,000 active companies in 2023, an increase from 49.6 per 10,000 active companies that entered liquidation in 2022. The rate in 2023 was the highest level since 2014, but still much lower than the peak rate of 94.8 insolvencies per 10,000 active companies during the 2008/09 financial crisis.
Almost all sectors experienced increased insolvency numbers in 2023, with the hospitality industry witnessing a 37% rise to 3,727 liquidations, wholesale and retail trade up by 20%, and an 18% increase in the manufacturing sector.
Nicky Fisher (pictured), President of R3, the UK’s insolvency and restructuring trade body, said: “The last year has seen a rising tide of corporate insolvencies. A combination of increased costs, cautious spending, creditor pressure, and the post-pandemic hangover have seen more businesses enter a corporate insolvency process to help address their financial issues than last year.
“Unless the economic picture improves, costs come down and people start spending, it seems likely that insolvency numbers will remain high this year.”
Derek Ryan, Managing Director of Bibby Financial Services UK commented: “Another peak in company insolvencies is a worrying sign of more trouble ahead, with SMEs in the eye of the storm. Squeezed at both ends by record high interest rates and inflation, the UK’s small businesses are also struggling to find the finance they need, as traditional lenders are increasingly retreating from the market in all sectors. Our research found two-thirds (67%) say banks are less likely to lend to them today.
“But the impact of this extends beyond the SME community, threatening the economic growth of the UK as a whole. It’s critical that both public and private sectors work together to incentivise growth and rebuild business confidence.”
