Corporate insolvencies in England and Wales increased by 9% to 1,011 in May 2021 compared with the previous month, and were 7% higher compared to May 2020’s figure, according to newly-published statistics from the Insolvency Service.
Responding to the figures, Philip Winterborne, Chair of the Welsh branch of insolvency and restructuring trade body R3 and a Partner at Temple Bright solicitors, said:
“The increase in corporate insolvencies in England and Wales in May has been driven by a rise in Creditors’ Voluntary Liquidations, while administrations have fallen to the lowest number since the start of the pandemic.
“While it’s too early to say whether the mild increase in corporate insolvency numbers is the start of something bigger, times remain tough for businesses in the UK.
“Government support has held off rather than halted the economic damage of the pandemic, preventing a serious rise in insolvency levels, but many business owners are now having to look ahead to how they’ll cope when these measures are withdrawn in the weeks and months ahead.
“Looking to the future, businesses are more confident about their ability to grow, but many are, quite rightly, still concerned about the continued effect of Covid restrictions. Business owners in some sectors will be feeling increasing concern at the prospect of another delay to the easing of lockdown in England, as recently announced by the Prime Minister.
“And although the economy continues to grow, there’s still a lot of ground to make up to fully recover from the unprecedented economic contraction in April 2021. Consumer spending has increased, but it’s still below 2019 levels, and while consumer confidence is improving, people are still worried about the future of the economy.
“We know it can be tough to talk about financial concerns – whether they’re personal or business – but doing so can make a huge difference. Anyone concerned about their financial situation should seek advice as soon as possible, so they can understand what options are available to them and so they have the most time to decide on an appropriate next step.”