R3 REACTION: Southern and Thames Valley R3 chairman Garry Lee
Business insolvencies more than doubled over the past year, according to R3, the trade body for restructuring and insolvency professionals in the South and Thames Valley.
Analysis of newly published figures for March 2022 from The Insolvency Service for England and Wales showed an 111% rise on the same month in 2021.
Nearly 500 more businesses went through an insolvency process in March 2022 compared with the month before, February 2022, with a jump in the number of directors opting to close their businesses down.
The figures for England and Wales showed:
- Corporate insolvencies increased by 39.4% in March 2022 to a total of 2,114 compared to February’s total of 1,517. They increased by 111.6% compared to March 2021’s figure of 999. They were also 71.2% higher than in March 2020 (1,235).
- Personal insolvencies increased by 17.2% to 11,530 in March 2022 compared to 9,836 in February. They were 5.3% higher than March 2021’s figure of 10,953. They were also 47.2% higher than in March 2020 (7,832).
Garry Lee, chair of R3’s Southern and Thames Valley region, said: “The figures reflect the challenge businesses continue to face.
“The increase in corporate insolvencies in March was driven by an increase in the number of Creditors’ Voluntary Liquidations (CVLs), a procedure initiated by directors of insolvent companies to close their company, which were almost 40% higher than the previous month.
“This suggests that many company directors have seen the increasingly difficult short-medium term economic prospects as something they won’t be able to overcome and have closed their company ahead of time.”
The monthly increase in personal insolvencies was driven by a rise in Individual Voluntary Arrangements and Debt Relief Orders (DROs).
Garry, who is an associate director in the recovery and restructuring services department at accountancy firm Smith & Williamson’s Southampton office, added: “Both firms and individuals in the South and Thames Valley have barely had time to draw breath.
“The crossover between the end of the pandemic and the increases in energy, fuel and food has hit finances hard, and the situation could become more challenging as the year goes on.
“Anyone who is worried about their finances – business or personal – in the South and Thames Valley is urged to seek help as soon as possible from a qualified and regulated advisor.
“Talking about money worries early gives you more options, more time to take a decision about your next move and potentially a better outcome than if you’d waited until the problem had become more serious.”
ENDS
