The number of registered company insolvencies climbed by 2% in December compared to the same month a year earlier, new figures published by the Government have shown.

According to the data, release by the Insolvency Service, total insolvencies rose from 1,965 in December 2022 to 2,002 last month.

This was higher than levels seen while the Government support measures were in place in response to the COVID pandemic, and also higher than pre-pandemic numbers.

The company insolvencies consisted of 153 compulsory liquidations, 1,731 creditors’ voluntary liquidations (CVLs), 103 administrations and 15 company voluntary arrangements (CVAs). CVL numbers were up on December 2022, while compulsory liquidation and administration numbers were down.

“December is a seasonal low point in terms of insolvencies – with the smaller number of working days affecting the number of insolvencies that are registered,” commented investment manager at Wealth Club, Nicholas Hyett.

“However, a 2% increase year-on-year suggests that companies are struggling with the higher interest rate environment. January’s numbers are worth watching closely, since a disappointing festive period can be the nail in the coffin for businesses that are already under pressure.”

The Insolvency Service figures also revealed that for individuals, the total number of insolvencies in December was 6,584, 20% lower than in the same month in 2022, when there were 8,254.

Individual insolvencies consisted of 496 bankruptcies, 2,472 debt relief orders (DROs) and 3,616 individual voluntary arrangements (IVAs).

“Individuals though seem to be faring better,” Hyett added. “That could be down to increased forbearance on the part of banks after the government lent on the sector to support mortgage holders back in the summer, although increases in DROs and bankruptcies shows there is clearly financial stress out there, particularly among the less well off.”

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