Corporate insolvencies in England and Wales decreased by 10.4% in October 2024 to a total of 1,747 compared to September's total of 1,950, and decreased by 23.8% compared to October 2023's figure of 2,293.

Commenting on the England and Wales statistics, Fran Henshaw, North West Chair of R3, the UK’s insolvency and restructuring trade body, says:

“The month-on-month and year-on-year fall in corporate insolvency numbers is the result of a decrease in all corporate insolvency processes, with the exception of Receiverships. On the face of it, this may seem surprising, as concerns about potential tax changes in the Budget

drove high numbers of Members’ Voluntary Liquidation in September and October as directors of solvent companies chose to wind down their businesses before any changes were announced.

“We have also seen a more positive trading climate recently as interest rates and inflation have fallen and retail, hospitality and construction have seen an improvement in spending, sales or output. Directors of firms in these sectors will be hoping this continues after a largely

challenging year, while retail and hospitality bosses will be hoping that this year’s Golden Quarter is a successful one, and retailers will hope this year’s Black Friday sales jump-start pre- Christmas consumer spending.

“The big question for many businesses is how the change to employer National Insurance Contributions that was announced in the Budget will affect them. Although this will increase costs for all but the smallest businesses, the feedback from the market is that some directors and management teams will look to manage this by managing their staff levels or raising their prices, and firms have time to work out how they will manage the increases in costs this policy will bring before it takes effect in April so the jury is still out on how this will affect levels of corporate insolvency.

“Directors will need to review all their costs and carefully think about how this additional expense can be absorbed. Given the potential impact this could have on their bottom lines, I would urge them to consider seeking advice from a qualified source about how they can best manage this so any potential issues can be identified and addressed as early as possible.

“The profession is also continuing to see an increased demand for, and a growing use of,

Restructuring Plans, with a number of big-name consumer-facing businesses turning to this process in recent weeks to help improve their financial position and keep their businesses and supply chains functioning. We still need to find a means of making Restructuring Plans

accessible to smaller firms, but the profession is working towards this as we know SMEs are keen to use them where appropriate.”

Fran, who is Head of Corporate Recovery and Insolvency at Beever and Struthers, continues: “Turning to personal insolvencies, the monthly fall in numbers is due to a reduction in Debt

Relief Order (DRO) and Individual Voluntary Arrangement (IVA) numbers, while the year-on-year fall in personal insolvencies is a result of fewer people entering an IVA than this time last year.

“DRO numbers have increased compared to this time last year, and this is because of changes to the debt threshold and the removal of the administration fee earlier this year, which has enabled more people to access this process.

“Breathing Space figures for September are unavailable, but the figures for October are 7% lower than the ones for the same month last year. Overall, while there has been a marginal improvement in personal financial distress in England and Wales, there were still more than

16,000 people seeking some form of either debt or insolvency support last month and personal finance issues are still a reality for a great many people.

“The main cause of this is the ongoing cost of living. Household budgets remain tightly stretched after two years of rising prices, and people are looking to save ahead of Christmas and the increase in heating and lighting costs that the winter months bring. People remain very concerned about their ability to pay their bills and are avoiding spending money on luxuries or major purchases and looking for deals, bargains and discounts as they look to cut costs wherever they can.

“As we come into a critical financial period for businesses and households, we urge anyone who is worried about money to seek advice from a qualified source as soon as they possibly can.

Money worries are one of the hardest topics to talk about, but having that conversation with a qualified advisor at the earliest possible opportunity will give you more options for improving your situation and more time to take a decision about your next step.

“Most R3 members in the North West will give prospective clients a free consultation so they can learn more about their circumstances and outline the potential options for improving them.”