January’s Insolvency Stats: Falling at the First Hurdle

December’s reduction in the number of corporate insolvencies ended 2024 on a high note. In fact, 2024 as a whole saw a slight decrease from 2023’s worrying figures. As a result, there may have been a glimmer of hope among some that this would herald in an era of recovery of which company insolvencies became far less frequent.

Unfortunately, that optimism hasn’t lasted long. January has crashed through the wall of any cosy shelter that 2024’s figures provided, exposing the possible harsh elements that lay ahead.

1,971 English and Welsh companies were declared insolvent over the course of January. This marks an 11.4% increase from January 2024’s 1,769, and an 18% rise from the 1,671 seen in 2023.

This January also recorded more insolvencies than the month immediately prior. December 2024 saw 133 fewer companies struggling to repay their debts, meaning that January’s figures marked a 7% monthly increase too.

UK companies “starting to cut their cloth accordingly”

Senior Client Manager at Forbes Burton, Ben Westoby suspected that this increase might have been on the horizon. He remarked that “the autumn budget’s heavy-handed measures have had UK businesses reeling. However, I expected this rise in corporate insolvency to occur after April, when many of the new policies are implemented.

“Many businesses though, are already starting to cut their cloth accordingly in anticipation for the changes. This means that any non-essential services they pay for will likely be cancelled, while suppliers will find even long-standing clients leaving to search for cheaper alternatives. This is sound forward-thinking from business owners, but does have the knock-on effect of rocking purveyors of luxury and more-expensive services.

“While the Insolvency Service’s statistics don’t give us an indication of the exact sectors affected, it would be little surprise to see a few extra B2B firms among those struggling this month. Expect to see B2B firms and especially recruitment agencies take further hits throughout the year as a secondary reaction to the budget changes”.

Elsewhere in January, Scotland’s 75 corporate insolvencies lent them a 15% decrease from the same period last year, whereas the 28 recorded in Northern Ireland was 7% lower.

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.