Insolvencies across England and Wales during July 2022 were up 67 per cent on figures from the same month in the previous year, according to numbers from the Office of National Statistics.
1,827 businesses went into a form of liquidation in the wake of Britain’s cost of living crisis. Businesses are facing pressures like never before with sky-rocketing prices coming as a result of the world’s response to the pandemic and the ongoing war in Ukraine.
With the new energy price cap now sitting at over £3,500, many businesses with offices will now be feeling the strain unless the new Prime Minister, appointed on 5 September, is able to address the issue.
At the start of the first lockdown in March 2020, England and Wales saw approximately 1,500 liquidations – 1,000 of which were Creditors’ Voluntary Liquidations.
The treasury, then led by former Chancellor Rishi Sunak, brought in a number of measures to help businesses as part of a Covid-relief financial package. This included measures like the bounce back loan scheme, that made borrowing capital much easier.
Business liquidations were on a continual decline until around May 2021. There were then more than 1,500 insolvencies in the following month and the total number peaked at over 2,000 in April 2022.
As the main source of insolvency, the trend of creditors voluntary liquidations have moved simultaneously with the overall number of insolvencies. Compulsory liquidations and other insolvencies make up a small portion of the total figure.
Despite briefly dropping from the 2,000 peak in May, insolvencies are expected to increase in line with the energy crisis that is affecting all households and offices across the United Kingdom.
The absence of governmental support, that was present through the pandemic, is also causing a problem for many SMEs.
Hospitality is being hit particularly hard because their industry has already had a difficult time with the pandemic and now they are faced with extortionate costs if they want to keep their premises warm in the winter. That, coupled with the desire of consumers to spend less money going out, could obliterate many involved in the sector.
Brewdog owner James Watt recently said there was “no prospect of help from clueless government” and went on to claim that Britain could lose half of its pubs.
If you are worried about becoming insolvent or you are unsure about going insolvent, get in contact with our compassionate experts at 0800 088 2142.