• 23 Aug 2024
• •
• 4 min read

Update on insolvency statistics: July 2024

The latest insolvency statistics for July 2024 for company and individual insolvencies were published on 20 August 2024 for England and Wales.

Whilst there has been a slight increase in individual insolvencies in July 2024 to the figures published in June 2024 for individual insolvencies, the slight dip in company insolvencies is not surprising, which we believe is due to many businesses still carrying on, likely biding their time to see what happens with the Autumn budget. The Chancellor has recently announced that the Government will give its first budget on 30 October 2024 in this press release. This has certainly led to an increase in solvent business transfer instructions as many hope to take advantage of the current tax regime to ensure efficient distributions of value.

The Bank of England recently cut interest rates to 5% in August, but inflation has risen by 2.2% in the year to July. As a result of the cuts, HMRC have confirmed that interest rates for late payments to HMRC will also be revised, as shown in this link. The changes will take effect from 12 August 2024 for quarterly interest payments and 20 August for non-quarterly interest payments.

Over the past month, the Restructuring & Insolvency team at Trethowans have:

•  seen an increase in property enforcement activity by lender clients
• assisted landlord clients impacted by retail insolvency (e.g. Carpetright)
• appointed administrators over a property investment company
• completed a pre-pack of a software technology firm saving a number of jobs and preserving value in the IPR
• advised directors ahead of formal insolvency in connection with prohibited name restrictions
• advised directors of insolvent companies being pursued for claims by liquidators arising from the pandemic period

Company insolvency statistics

• The number of registered company insolvencies for July 2024 was 2,191 which is 7% lower than June 2024, but 16% higher than it was in July 2023 (1,890).
• Company insolvencies remain higher than they were during the pandemic and between 2014-2019.
• Company insolvencies in July 2024 consisted of 320 compulsory liquidations, (the highest monthly number since before the pandemic), 1,691 creditors’ voluntary liquidations (CVLs), 155 administrations and 25 company voluntary arrangements (CVAs). All types of company insolvency were higher than in July 2023, which again shows many businesses continue to be impacted by difficult trading conditions.
• Compulsory liquidations remain lower than CVLs, however they are slowly increasing over time, as can be seen from the below graph:

Source for photo: https://www.gov.uk/government/statistics/company-insolvency-statistics-july-2024/commentary-company-insolvency-statistics-july-2024

• The construction industry remains the sector with the highest number of company insolvencies, but in the 12 months to June 20204 compared to the previous 12 month period, insolvencies increased by the most in the accommodation and food service activities sector.
• The insolvency rate in the 12 months ending July 2024 was higher than reported during pre-pandemic levels which has been caused by a higher rate of CVLs.
• In July 2024, CVLs accounted for 77% of all company insolvencies.
• Compulsory liquidations in July 2024 was the highest number since August 2018, 5% higher than June 2024 and 27% higher than July 2023.
• CVAs were reported to be 32% higher in July 2024 than July 2023.
• The number of administrations in July 2024 was higher than July 2023, but lower than June 2024.
• Company insolvencies in 2023 and the first half of 2024 were reported to be at levels last seen during the 2008-2009 recession, shown in the below graph:

Source for photo: https://www.gov.uk/government/statistics/company-insolvency-statistics-july-2024/commentary-company-insolvency-statistics-july-2024

Individual insolvency statistics

• The number of individuals entering insolvency has also increased again in England and Wales, to 10,524. This is 24% higher than in 2023.
• Individual insolvency numbers were lower in July 2024 than June 2024 but higher than July 2023.
• The individual insolvencies consisted of 634 bankruptcies, 4,163 debt relief orders (DROs) and 5,727 individual voluntary arrangements (IVAs). The last 4 months have shown the highest monthly number of DROs since they were introduced, showing that this is gaining popularity since the removal of the £90 administration fee to obtain a DRO from 6 April 2024.
• The figures show a decline in the number of bankruptcies to what they were 10 years ago; these numbers have declined since 2009 and even more so during the pandemic. In the 12 months to 31 July 2024, 57% of individual insolvencies were IVAs, 36% were DROs and 7% were bankruptcies. In contrast, 10 years ago, 52% were IVAs, 27% were DROs and 21% were bankruptcies.
• 78% of bankruptcies resulted from debtor applications and the number of creditors’ petitions have decreased. 
• The below table shows the increase in individual insolvencies from 2023 to 2024:

How can we help?

Trethowans have a specialist team of lawyers both in our Restructuring & Insolvency and Commercial Litigation teams who have vast experience in acting for Insolvency Practitioners, lenders, directors and creditors for restructuring and insolvency related enquiries.

If you require further advice, please do not hesitate to contact Melia Hirst or Maria Evans to discuss your enquiry further.

This information is current as at 22 August 2024.