Corporate insolvencies fall in July 2024

In July 2024, corporate insolvencies in the UK experienced a notable decrease of 7.3% compared to the previous month, according to the latest data from the Insolvency Service. The total number of corporate insolvencies stood at 2,191, down from 2,363 in June. However, when compared to the same period last year, the figure represents a significant increase of 15.9% from July 2023’s total of 1,890.

The year-on-year rise in insolvencies reflects the ongoing challenges businesses have faced in the post-pandemic economic landscape. The current figures also indicate an 8.9% increase from July 2022, when there were 2,012 corporate insolvencies, and a striking 52.2% rise compared to pre-pandemic levels in July 2019, which saw 1,440 insolvencies.

Personal insolvencies mirrored this trend, with a slight decrease of 0.2% in July 2024, bringing the total to 10,524 from June’s 10,548. Despite this minor decline, personal insolvencies have surged by 24.1% compared to July 2023, which recorded 8,479 cases. Additionally, the number of personal insolvencies has grown by 11.1% from July 2022’s figure of 9,475, though it remains 14.1% below the pre-pandemic level of 12,253 in July 2019.

He noted, “Despite a decrease compared to last month, July’s corporate insolvency figures are the highest we’ve seen for this month since 2019, as a result of increases in Compulsory Liquidation, Administration, and Creditors’ Voluntary Liquidation (CVL) numbers compared to July 2023 and 2019.”

Cooper highlighted the ongoing dominance of CVLs as the most common corporate insolvency process. Although the number of CVLs fell slightly compared to the previous month and July 2022, their continued prevalence, particularly among smaller businesses, underscores the difficult trading conditions that have persisted over the past four years.

The rise in administration numbers compared to last year was identified as a potentially positive sign for business rescue prospects, emphasizing the importance of early intervention and advice in exploring restructuring options. However, the increase in Compulsory Liquidations suggests that creditors are still facing considerable financial pressures.

Cooper also pointed to recent improvements in market and economic conditions, which have been bolstered by a successful summer of sport and greater stability following the General Election. These factors have led to better trading conditions for key sectors such as retail, hospitality, and construction. The construction industry, in particular, is expected to benefit from upcoming government housing and infrastructure initiatives, though the impact of these measures will take time to materialize.

Looking ahead, Cooper expressed optimism about the future, noting that the improved economic climate should lead to “greater acceptance and success of rescue proposals”. He also observed a growing interest in Restructuring Plans among businesses of various sizes, which he sees as a positive development for the insolvency profession.

Overall, while the decrease in insolvencies for July 2024 is encouraging, the significant year-on-year increases serve as a reminder of the ongoing challenges facing UK businesses as they navigate the post-pandemic recovery.