Upward trend in insolvencies
May 15th, 2017
Corporate insolvencies are now running at more than 5% higher than 12 months ago (ref: The Insolvency Service).
Following a period of calm in 2016, insolvencies are now showing an upwards trend from a post financial crisis peak.
Martin Williamson, Managing Director at ipd, said factors including a rise in the national minimum wage, pension auto-enrolment and a fall in the value of the pound may be behind the rise.
“Official statistics suggest that insolvency trends are on an upward path for the first time since the worldwide economic crash,” said Martin.
“There are rising pressures on some businesses such as importers who have seen their costs rise since the Brexit vote.
“The best advice is to get early assistance in an effort to avoid insolvency. Measures can be put in place to save many firms if an insolvency practitioner is able to work in partnership with a business.”
A study by trade body R3, revealed that in 2013-14, insolvency practitioners were able to rescue 1,400 businesses and save 36,000 jobs in the Midlands and East of England.
Problems are particularly significant on UK High Streets. Recent casualties include fashion retailer Jaeger which has filed notice to appoint administrators at the High Court.
Jaeger’s sales dropped from £84.2m to £78.4m in 2016 while it recorded a loss of £5.4m, and last year it closed three stores including its Regent Street flagship.