Business insolvency cases increase in third quarter
The number of business insolvencies rose in the third quarter, according to new figures from the Insolvency Service.
Business insolvency was up 1.1% from the same quarter in 2015, and rose 2.2% from the period of April to June this year.
It meant 3,633 businesses were declared insolvent, while 632 companies entered compulsory liquidation – a rise of 2.4% on a year previously, but down by 4.5% on the second quarter of this year.
The robustness of modern recovery procedures has aided many firms, as they are able to effectively assess their options and take action accordingly.
Acting early is key, as businesses can look to work closely with suppliers to ease cash flow pressures and can also consider the alternative financial options that might be available.
The impact of Brexit may also influence the sector, although at this stage it is unclear to what extent this will be the case.
Personal insolvency levels also rose during the third quarter, as 24,251 were declared between July and September in England and Wales.
That represents a rise of 6% from the second quarter, and is up nearly 20% on the same period a year previously.
The Insolvency Service also revealed a spike in individual voluntary arrangements, with the take-up of IVAs nearly 29% higher than the third quarter in 2015, and 10.9% up on the second quarter of this year.
The president of insolvency trade body R3, Andrew Tate, linked the rise in personal insolvencies with the cost of living and inflation rates, adding that even small shocks can make someone insolvent in the current climate.
However, the Insolvency Service adds that the wider trend between 2010 and early 2016 was for personal insolvency rates to decline, with the last two quarters bucking the trend.
By Phil Smith
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