- Corporate insolvencies fell by 11.4% in December 2021 to a total of 1,486 compared to November’s total of 1,678, and increased by 20.1% compared to December 2020's figure of 1,237 and rose by 32.7% compared to December 2019 (1,120)
- Personal insolvencies fell by 10.1% to 8,434 in December 2021 compared to 9,385 in November 2021, and were 12.4% lower than December 2020's figure of 9,625.
Eleanor Temple (pictured), chair of insolvency and restructuring trade body R3 in Yorkshire and a barrister at Kings Chambers in Leeds, responds.
“The monthly fall in corporate insolvencies has been driven by a reduction in all forms of corporate insolvency process. However, the annual and two-yearly increase in corporate insolvencies has been driven by a rise in Creditors Voluntary Liquidations, which suggests that the economic situation is pushing many company directors to voluntarily close their businesses before that decision is made for them.
“Despite the month-on-month fall in corporate insolvencies, December marked a tough end to a torrid year for many businesses. Increasing COVID cases, rising costs and falling consumer confidence hit footfall and sales, and company directors and management teams also had to work in the midst of new COVID restrictions, which will have affected day-to-day operation, customer behaviour and revenue levels.
“This is especially true in sectors like retail and hospitality, which normally have their busiest periods in December, but faced an unhappy Christmas this year.
“With the latest COVID restrictions set to last until the end of this month, business owners need to remain alert, and if the measures lead to their business becoming financially distressed, they need to seek advice as soon as this happens.
“Most insolvency practitioners will offer a free hour’s consultation to potential clients, so they can understand more about their business, its circumstances and outline what options might be open to it.
“Turning to the personal insolvency figures, the monthly reduction has been driven by a reduction in all forms of personal insolvency process, while the annual fall can be attributed to a drop in bankruptcies and Individual Voluntary Arrangements.
“Despite this, times are still tough for people in England and Wales. Many are worried about the future of the economy and their own personal finances, and are cautious about how they spend their money and what they spend it on.
“Inflation is also becoming a problem, with rising energy bills and increasing household costs squeezing people’s finances. We’re also seeing growth in demand for unsecured credit as people turn to credit cards and overdrafts to pay for Christmas or to help manage their finances.
“On the plus side employment is rising, but it remains to be seen whether wages will as well, as the economic effects of COVID continue to hit businesses.
“Our advice for anyone who is worried about their finances is simple: seek advice now. The earlier you do so, the more options you have available, and the more time you have to make a considered decision about which of the potential next steps is right for you.”