R3 Southern and Thames Valley responds to August 2022 insolvency statistics
R3, the trade body representing restructuring and insolvency professionals, has urged businesses to seek help at the first sign of financial distress.
The caution comes following figures released which show that corporate insolvencies in August reached their third highest monthly total in three and a half years, numbering 1,933.
The figures from The Insolvency Service show:
- Corporate insolvencies increased by 5.5% in August 2022 to a total of 1,933 compared to July's total of 1,832. They increased by 43.4% compared to August 2021's figure of 1,348.
- Personal insolvencies increased by 4.1% to 9,572 in August 2022 compared to 9,198 in July. They were 5% higher than August 2021's figure of 9,117.
Garry Lee, chair of R3’s Southern and Thames Valley region, said: “Continued economic volatility continues to make itself felt in the latest monthly figures.
“The increase in corporate insolvencies – to the third highest set of monthly statistics since January 2019 – has mainly been caused by an increase in the number of Creditors’ Voluntary Liquidations.
“This suggests that directors remain concerned about their ability to continue to trade in the current climate and are choosing to close their businesses before that choice is taken away from them.”
All three of the highest monthly corporate insolvency totals since January 2019 have been recorded this year, with figures of 1,990 in April and 2,120 in March.
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Garry, an associate director in the recovery and restructuring services department at professional services group Evelyn Partners’ Southampton office, said: “The latest figures will be a sobering reminder to government of the scale of the challenge facing the UK economy as we head into the winter months.
“Companies in the South and Thames Valley are facing enormous running cost hikes just as household spending is facing its biggest squeeze in several decades which delivers yet another blow to business owners who were hoping to bounce back to normal trading levels post-pandemic.
“Many directors and managers are worried about the rise in prices and energy costs and the effect these will have on their margins and profits, and this is set to continue to be a concern.”
“We urge anyone who is worried about their business or personal finances to seek advice from a qualified and regulated source as soon as possible.
“Talking about your concerns about money is difficult, but the sooner you seek advice, the more potential options you have open to you, and the more time you have to take a considered decision about your next step.
“Most R3 members will give free initial advice to potential clients to enable them to understand more about their circumstances and explain the potential options that are open to them to help resolve their situation.”
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