R3 Southern and Thames Valley responds to May 2022 insolvency statistics

WINDING-UP WARNING: Southern and Thames Valley R3 chairman Garry Lee

THAMES AND SOUTH CHAIRMAN: Garry Lee urges businesses to take advice immediately if financial problems arise

Businesses in the South and Thames Valley are being urged to seek support at the first sign of financial distress by R3, the trade body for restructuring and insolvency professionals.

The warning comes after the publication of corporate and personal insolvency figures for May in England and Wales.

They showed that corporate insolvencies reached their third highest monthly total since the start of pandemic although they were slightly down on April.

The figures from The Insolvency Service showed that:

  • Corporate insolvencies decreased by 8.9% in May 2022 to a total of 1,817 compared to April’s total of 1,995, but showed an increase of 79.2% compared to May 2021’s figure of 1,014.
  • Personal insolvencies increased by 11.2% to 10,476 in May 2022 compared to 9,417 in April, and increased by 23.3% compared to May 2021’s figure of 8,496.

Garry Lee, chair of R3’s Southern and Thames Valley region, said: “Insolvency trends are still uneven.

“Although down on April, the number of corporate insolvencies in May was the third highest since the first lockdown in March 2020.

“Firms in the South and Thames Valley have been buffeted by rising costs and falling consumer confidence and spending over recent months, which has meant they haven’t made the additional income needed to offset increased expenditure.

“There simply hasn’t been time to draw breath between the issues caused by the pandemic and those now arising from our current economic challenges.

“Many businesses who have survived so far are now starting to struggle – and rising interest rates will add extra costs for firms to deal with.”

Garry, who is an associate director in the recovery and restructuring services department at professional services group Evelyn Partners’ Southampton office, added: “The best thing any businesses or individuals who are worried about money can do is seek advice from a qualified and regulated advisor as soon as possible.

“Having the conversation at an early stage will give you more potential options and more time to consider your next step than if you had waited until the situation worsened.”

Corporate insolvencies in May comprised 135 compulsory liquidations, 1,584 creditors’ voluntary liquidations, 84 administrations and 14 company voluntary arrangements.

The monthly increase in personal insolvencies was mainly driven by a rise in the number of people entering an Individual Voluntary Arrangement or Debt Relief Order, while bankruptcies were also up slightly on last month.