Matt Richards and Louise Brittain, Restructuring and Insolvency Partners at Azets, the UK’s largest regional accountancy and business advisors to SMEs, comment on the September 2021 corporate and personal insolvency statistics for England and Wales.
Matt Richards, Restructuring and Insolvency Partner at Azets said:
“The number of corporate insolvencies in September (1,446) increased from 1,349 in August and 1,096 in July, and we expect this upward trend to continue now the government has withdrawn most of its corporate support measures.
“While the number of insolvencies in September 2021 was slightly below the number of insolvencies two years ago in September 2019 (4%), the additional pressures facing businesses today with higher inflation, staff shortages, increasing energy prices and the need to repay Covid incurred debt, is likely to lead to increased numbers of insolvencies over the next 12 months.”
Louise Brittain, Restructuring and Insolvency Partner, said:
“There is a big increase in individuals finding it necessary to seek formal personal insolvency relief, either through the Debt Relief Order (DRO) process or the Individual Voluntary Arrangement (IVA) process, with both returning to pre-pandemic and above levels. DROs jumped from 1,719 in August 2021 to 2,150 in September 2021, an increase of nearly 25%and IVAs went from 6,776 to 7,190, an increase of just over 16%. This has brought the total number of personal insolvencies up to 9,954 this month compared to 8,272 in January 2019. If increases remain at this level, personal insolvency numbers for the year could well exceed 100,000.
“It is clear the withdrawal of the furlough scheme and increases in fuel, food and essential living costs are pushing individuals into formal insolvencies. With the proposed 1.25% increase in NI next year, we can expect to see these numbers continue to rise. Households are under financial stress, and with the NI increases looming we can expect to see reduced spending on the high street over Christmas as individuals brace themselves for a tough year next year.”