We knew it was coming. At TruSolv, we’ve seen the rise in cases slowly gathering momentum over the last 6-12 months. Last Friday, when the latest monthly insolvency statistics were released by The Insolvency Service, the official data confirmed our observations.

The Insolvency Service began tracking company insolvencies on a monthly basis in January 2019. In May 2023 there were 2,552 registered company insolvencies, a 40% increase compared to May 2022. In Q4 2022, registered company insolvencies hit a 13-year high and have hovered around that mark since.

Cashflow problems aren’t going away

The core issues remain in place:

• Normal trading levels have struggled to return for many industries following the pandemic, and now consumers are hit with the cost of living crisis and high inflation rates
• Energy costs, material costs and labour costs have all increased significantly over the last 12 months
• Financing costs continue to increase with yet another interest rate rise announced this week

There is little reprieve at all for businesses and what little buffer they may have had has been used already.

Creditor voluntary liquidations (CVLs) have risen significantly

Of the 2,552 registered company insolvencies in May 2023, 2,181 were CVLs. In April 2023, 1,368 CVLs were registered. Company directors are proactively taking action to wind up the business before any formal court orders are issued to force the closure.

That said, compulsory liquidations have increased from the historical lows due to the pandemic by 34% year-on-year.

Most impacted sectors

Construction and retail companies remain the most impacted sectors, although the number of food manufacturers is also increasing.

We’ve seen a mix of sectors coming to us recently, from multimillion-pound infrastructure services to electricians. The theme seems to be that projects are being pulled, with corporates and individuals collectively tightening their belts.   

Company directors need to act now

It’s a message we share all the time but the fact is company directors need to act now. The cashflow problems won’t be turned around without some form of intervention. The sooner you act to make a decision and seek support, the greater the chance you have of having options to choose from.

We speak to company directors all the time who have tried to ignore their problems or just felt like they didn’t know how to face them. With over 30 year’s experience helping these directors, we understand how you feel, and we can help you move forward.

Call us today on 0808 196 8676.