Close Menu
UK Liquidators

Insolvency Related News

Latest News from UK Liquidators

Low-Cost Liquidation
100% Confidential
Stop HMRC & Creditor Pressure
Partner-led Service

650,000 UK Companies in ‘Significant Financial Distress’

By Jon Munnery
28 July 2021

There were estimated to be around 650,000 companies across the UK in ‘significant financial distress’ during the second quarter of 2021.

Those figures represent a 24 per cent increase compared to the same period in 2020 but a 10 per cent decrease compared to the first three months of this year.

With the economy having opened up gradually over the course of recent months in line with Covid-19 protocols, there are clearly huge numbers of companies still struggling to manage their cashflows and to stay in business.

The data on levels of financial distress among UK companies comes from the corporate insolvency specialists at Begbies Traynor and its Red Flag Alert report, which says the opening up of the economy has seen some businesses making new arrangements with their creditors and paying down some of their debts.

However, it is clear from the latest figures that large numbers of companies will be struggling to pay off what debts they owe in the coming months.

A record-setting 723,000 businesses were significantly distressed financially in Q1 2021 but those numbers have fallen back at least somewhat more recently.

Many companies have effectively been protected from creditor action by a moratorium on court actions during the pandemic but those activities are beginning to pick up and some creditors are becoming more aggressive in how they chase their debts.

A total of 14,460 businesses are understood to have been on the receiving end of County Court Judgements (CCJs) during the second quarter of this year, which represents a 90 per cent uplift compared to the same period in 2020.

According to Julie Palmer, a partner at Begbies Traynor, there are large numbers of businesses continuing to operate despite being in deeply perilous and ultimately unsustainable financial positions.

She has said that the pandemic has contributed to creating a situation in which companies find themselves both heavily indebted and struggling to generate enough cashflows to start making repayments.

“Covid has dramatically accelerated the UK’s zombie business population with many businesses taking on unsustainable government-backed debts during the pandemic in order to survive,” Ms Palmer explains.

“With constant changes to the UK roadmap out of lockdown, many remain in a precarious position, with any future lockdowns likely to impact insolvency rates,” she added.

Jonathan Munnery
Partner
Is Liquidation the best option for you?

By completing the test, you will receive:

Your Liabilities & Assets
Types of Liquidation Available
Your Companies Health Risk
Alternatives to Consider
Related Articles
01/09/2021
Hospitality Businesses ‘Still Fighting for Survival’ After Reopening
Thousands of businesses in the hospitality sector are still fighting for survival despite the UK economy having reopened and Covid-related restrictions on their activities having largely been lifted.
Read more
18/08/2021
Rise in Insolvencies Driven by Increase in Creditors’ Voluntary Liquidations
The Insolvency Service has reported a sharp increase in corporate insolvencies across England and Wales in the second quarter of 2021, with Creditors’ Voluntary Liquidations (CVLs) accounting for a large majority of cases in the period.
Read more
26/05/2021
Reintroduction of Winding Up Petitions ‘Will Add to Pressure on Struggling Firms’
The lifting of the ban on winding up petitions in the UK will add notably to the financial pressures being faced by struggling firms across the country.
Read more
Ready to Liquidate?
Express Liquidation Service
Ready to start liquidating today? Complete the form and a member of our team will be in touch.
Please note: By completing this form you are not liquidating your company
Contact the UK Liquidators Team

If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.

  • Free initial consultation
  • Strictly confidential
  • Fully licensed insolvency practitioners
  • Local office support
  • Named case handler throughout
Logo Tma
Logo Business Recovery
Logo Cse
Logo Iip

Looking for immediate support?

Complete the below to get in touch

 
 
 
 
 
100% Free & Confidential Advice