September Insolvencies Down from August, but Businesses Still Struggling

There’s good news and bad news within the latest insolvency statistics released by the Insolvency Service. While the total number of corporate insolvencies this September was higher than in the same month last year, there were also fewer than those seen just recently in August 2023.

Optimists may hope this could mark the start of a downward curve for insolvencies, but realistically, trading circumstances are harder than they’ve been for some time for a number of companies. High interest rates and utility bills are making the day-to-day operation of businesses expensive, with the change in weather as we head toward winter only set to exacerbate matters. As these struggles are felt across all sectors, profit margins are also being squeezed as suppliers are forced to raise their prices too.

Perhaps more concerning still, is the more frugal nature the public are adopting in order to combat their own living costs. Without that purchasing power present at the bottom of the chain, more and more companies could be set to hit trouble in the coming months.

Looking at previous Septembers in recent history doesn’t make for any easier reading. September 2023’s figure of 1,967 is not only 17% higher than September last year (1,688), but also 35.4% higher than September 2021 (1,453), 112% higher than September 2020 (928), and 30.4% higher than September 2019 (1,509).

While some of those figures need to be read with the COVID-19 pandemic in mind, 2019’s lower pre-pandemic numbers give a steady, unaffected base to compare against. Government COVID-19 rescue schemes are starting to come to an end now though and could spell the end for those that have depended on them to prop themselves up over the last few years.

Almost all forms of corporate insolvency processes have risen on an annual basis recently, with the exception being CVAs, which have stayed at a similar number for a while now.

These business insolvencies for September can be broken down into creditors’ voluntary liquidations (CVLs), compulsory liquidations, administrations, and CVAs. While the 11 CVAs recorded in September rested at the same figure as September 2022, each of the other methods saw a sizeable increase from the same month last year.

• 1,567 CVLs is a 14% increase on September 2022
• 255 compulsory liquidations shows a 19% increase
• 125 administrations shows a 47% increase

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