Insolvencies rates more than double a year ago

THE increasing economic impact of the pandemic has been laid bare by the number of corporate insolvencies across England and Wales in April being more than double the figure for the same month last year, a regional insolvency body has said.

Latest statistics from the Insolvency Service statistics revealed that there was a 115.2% year-onyear increase from the 925 cases of corporate insolvency registered in April 2021 up to the 2,114 cases lodged last month. The increase follows the phasing out of measures brought in during the pandemic to protect companies in pandemic-related financial distress from creditor action.

Chris Ferguson, North East chair of insolvency and restructuring trade body R3, said: “The year-on-year doubling in corporate insolvencies highlights the key role the Government’s support initiatives played in preventing the economic damage of the pandemic from translating into an increase in corporate insolvencies.

“High levels of creditor voluntary liquidations, a procedure initiated by directors of insolvent firms to close their companies, also suggests that large numbers of them lack confidence in their ability to continue trading in the current climate, and are choosing to close their businesses now rather than being forced to in the future.

“The new figures also clearly reflect the continued toll the economic turbulence is taking on the business community, especially as the boom many were hoping for when pandemic restrictions ended simply hasn’t happened as the UK has moved from one damaging set of economic stressors to another without any time to draw breath.”