Close Menu
UK Liquidators

Insolvency Related News

Latest News from UK Liquidators

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

Business Insolvency Rates Set to Rise, Says Bank of England

By Jon Munnery
14 October 2021

Rates of business insolvency across the UK are likely to increase during the final three months of 2021, according to the Bank of England.

The Bank has suggested that the removal of important protections for companies in debt will contribute to a notable rise in insolvency rates in the fourth quarter of the year.

Corporate insolvency rates have been at historically low levels in recent quarters, largely because of financial support being provided to struggling businesses by the government and an official ban on winding up petitions during the first 18 months of the Covid pandemic.

However, with direct financial support for businesses having been significantly scaled back and the ban on winding up petitions having been lifted from October, expectations are that corporate insolvencies will become much more commonplace in the coming months.

In its assessment of dynamics at play with the UK economy recently, the Bank of England noted that increases in debt levels among businesses have generally been concentrated among SMEs rather than larger companies.

The Bank has also said that a lot of SMEs that took on debt during the pandemic would not have been able to borrow as much money as they did if it weren’t for their loans effectively being guaranteed by government.

Overall, the assessment of leading experts is that the prospect of insolvency will be looming large for a lot of SMEs heading towards the end of the year.

“The increase in debt - though moderate in aggregate - has likely led to increases in the number and scale of more vulnerable businesses,” noted the Bank of England’s latest policy summary.

“As the economy recovers and government support, including restrictions on winding up orders, falls away, business insolvencies are expected to increase from historically low levels.”

The latest figures released by the Insolvency Service indicated that cases of corporate insolvency in England and Wales were already on the rise in August of this year.

Creditors’ Voluntary Liquidations (CVLs) increased by as much 115 per cent between August 2020 and the same month of this year, with CVLs cited as being the main driver of an increase in overall corporate insolvency numbers.

Jonathan Munnery
Insolvency & Restructuring Expert
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
22/10/2021
Voluntary Liquidation Rates Up to Highest Levels in Almost 3 Years
The rates at which companies in England and Wales were being placed into liquidation on a voluntary basis increased to the fastest pace since January 2019 during September of this year.
Read more
15/09/2021
Insolvency Protection Measures to be Phased Out from October
Measures introduced to protect struggling businesses from being forced into insolvency or liquidation during the pandemic are to be phased out from October 1st, the government has confirmed.
Read more
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
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

This site uses cookies to monitor site performance and provide a more responsive and personalised experience. You must agree to our use of certain cookies. For more information on how we use and manage cookies please read our PRIVACY POLICY