2024 Insolvency Statistics: Calm Before the Storm?

Now that The Insolvency Service have released their corporate insolvency figures for December 2024, we can finally start to look at 2024 as a whole. It’s been a topsy-turvy year in terms of insolvencies but despite some monthly increases from 2023, the year actually rounded itself off with fewer company closures than its predecessor.

An adjusted 23,872 company insolvencies were recorded by The Insolvency Service throughout England and Wales in 2024. This marks a 4.8% decrease from 2023’s particularly high figure of 25,096.

A year of ups and downs

While some months provided substantial decreases in the corporate insolvencies recorded in 2023, there were others that suggested worse was to come instead. February, April and July saw respective 17%, 29%, and 26% rises from their counterparts 12 months prior. Political events such as the spring budget and July’s general election were perhaps in the minds of some beleaguered company owners here.

In fact, looking at 2024 quarterly, it wasn’t until the tail end of the year that substantial improvements were noted. When comparing against 2023 again, Q1’s 3.8% decrease in insolvencies was effectively cancelled out by Q2’s 3.1% increase, while Q3 saw a modest increase of 1.9% as well.

Q4, however, brought with it an unexpected 18.1% decrease in company closures to completely change the narrative of the whole year. The 5,551 listed in 2024’s final three months even marking a 6.7% decrease from Q4 2022, a year with 7.8% fewer insolvencies overall.

A not-so-bleak midwinter

The 1,838 corporate insolvencies seen in England and Wales throughout December not only marked a 6.5% decrease from the November preceding, but also a 6.4% decrease from the same month the year before.

77% of December’s insolvencies were CVLs, although this was a 8% decrease from November and a 22% decrease from December 2023.

82 Scottish firms and 23 based in Norther Ireland filed for insolvency in December, marking a respective 24% and 4% decrease from the same month in 2023.

“Don’t uncork the Champagne just yet”

Forbes Burton’s Senior Client Manager, Ben Westoby is cautious to get too carried away with the improving figures. “This could sadly be the calm before the storm” Westoby remarked, adding that “I fully expect another surge in insolvencies once 2024’s autumn budget measures come into effect.

“April will suddenly introduce higher minimum wages and bigger National Insurance bills for many businesses, while those in hospitality will experience a 35% increase in business rates when their temporary relief of 75% becomes a permanent relief of 40%.

While the beginning of the year may continue the trend of falling insolvency numbers, don’t uncork the Champagne just yet, as April’s budget measures will almost certainly make life much harder for UK businesses”.

Don’t wait till April in the hope your business can survive

If you think your business might struggle to continue in its current form during 2025, you need to seek expert advice now on how you can navigate the future.

We have specialists on hand that can help you to facilitate turnaround strategies, sell your business, or close down your company depending on the best route available to you. Call us on 0800 975 0380, or email [email protected] for a free consultation.