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Company insolvencies in England and Wales return to pre-lockdown levels

Company insolvencies in England and Wales return to pre-lockdown levels
Company insolvencies in England and Wales return to pre-lockdown levels   -   Copyright  Thomson Reuters 2021
By Reuters

LONDON – Company insolvencies in England and Wales rose last month and returned to levels seen just before the COVID-19 pandemic, official data showed on Friday.

The government’s Insolvency Service said 1,446 companies registered for insolvency last month, up 56% from a year ago but still down 4% on September 2019.

Company insolvencies – including voluntary liquidations, administration and bankruptcies – fell sharply last year due to the COVID-19 pandemic, which caused big backlogs in courts. Some businesses that would have folded also received support from government programmes.

The bulk of the insolvencies in September comprised creditor voluntary liquidations.

“This suggests that directors are choosing to close their businesses after deeming their financial survival unlikely after 18 months of trading through a pandemic,” said Nicky Fisher, deputy vice president of insolvency and restructuring trade body R3.

Individual insolvencies showed a similar pattern. While bankruptcies were still down compared with a year ago, debt relief orders – a form of insolvency for people with debts of less than 30,000 pounds ($41,000) – rose to their highest since around the start of lockdown.