Insolvencies fell sharply during the coronavirus pandemic, when 1.7 million businesses were propped up by 80 billion pounds ($99.9 billion) in government-backed loans and there was a ban on many court proceedings to force businesses into liquidation.
Many firms have especially come under more pressure since the government stopped providing new
pandemic loans in May 2021 and as protection from court proceedings has been phased out over the
past six months.
Company insolvencies in England and Wales actually rose to their highest since 2012 in the first three months of this year following the end of emergency Covid support measures, while individual
insolvencies were the highest since 2018.
A total of 4,896 companies became insolvent in the first quarter of this year, up from 4,615 in the last quarter of 2021 and double the number a year earlier according to government figures. “Voluntary” liquidations - where creditors and companies reach a deal outside court - hit the highest since records began in 1960 but compulsory liquidations stayed below pre-pandemic levels.
Company insolvencies are also likely to rise further in coming months due to surging operating costs and the recent removal of the last pandemic-related court protections. In fact, personal insolvencies are also on the increase. The number of individual insolvencies in England
and Wales was 14% higher than a year earlier at 32,305, equivalent to 0.24% of adults and the highest number since the final quarter of 2018. Britain's Office for National Statistics has said that 23% of households had reported they were finding it harder to pay their bills than a year ago, up from 17% in November.
