Insolvency Update: July Sees a 1% Surge
The latest figures from The Insolvency Service show that company filings for insolvency rose by 1% in July, beating the previous month. It’s a tidy reminder that the business scene isn’t all rosy.
Where the Trouble Lies
- Construction – the big, bulky sector hit with high material costs.
- Wholesale & Retail – consumer shelves are shrinking fast.
- Accommodation & Food Service – restaurants and hotels keep losing patrons.
These industries together take up 47% of all insolvency cases. It’s the 3‑mile‑deep challenge for the UK’s economy.
2024 Numbers in a Nutshell
Throughout the year, 23,872 companies were declared insolvent. Breaking that down:
- 18,840 Creditor’s Voluntary Liquidations (CVLs)
- 3,230 Compulsory Liquidations
- 1,597 Administrations
- 202 Company Voluntary Arrangements (CVAs)
- 3 Receivership Appointments
25% of these were new CVLs, which dropped 8% from the 2023 record. Compulsory liquidations jumped 14% from the previous year, hitting the highest level since 2014. Administrations and CVAs were up 2% and 9%, respectively.
Insolvency Rate – A Slight Decline
One in 191 companies on the Companies House register filed for insolvency in 2024, or 52.4 per 10,000 companies. That’s down from 57.2 in 2023, and far below the 2008‑09 peak of 113.1. Even though the absolute number of cases is similar to 2008 and 2009, the number of companies registered has more than doubled, so the rate is lower.
Expert Voices on the Heat
Freddy Khalaschi – Business Recovery Partner, Menzies
“The summer heat is bearing down on British businesses,” Khalaschi says. “Thames Water’s reserves are drying up, Claire’s is in administration, River Island nearly followed suit after a restructuring, and over a thousand pubs and restaurants have gone under since the last Budget. Consumer confidence is fragile, house prices are falling, and the labour market is churning. A few havens of stability are needed.”
He urges businesses to act swiftly on cash‑flow issues, seek professional help early, and keep options open to preserve profitability.
Simon Edel – UK Turnaround and Restructuring Strategy Partner, EY‑Parthenon
Edel highlights a surge in sanctioned restructuring plans: 13 in July versus just nine for all of 2024. Administration activity rose 24% from June and is 5% higher than July. “Companies are feeling the relentless uncertainty from geopolitical tensions, policy shifts, and high interest rates,” he notes, adding that costs like National Insurance and the Living Wage are squeezing margins further.
He advises firms to focus on bolstering liquidity, adopt scenario‑based forecasting, and maintain solid trading performance to keep stakeholders confident.
Ultimately, the data paint a picture of a market still in flux. The next Budget will be pivotal—seeking to alleviate pressure on businesses and inject more cash into consumers’ pockets for that green‑shoot recovery we all hope for.
