• Corporate insolvencies increased by 5% in January 2024 to a total of 1,769, compared to 1,685 in January 2023. This is lower than the year-on-year increase in January 2023 or 7.5%.

• Personal insolvencies increased by 4.3% in January 2024 to a total of 8,089, compared to 7,756 in January 2023. Despite this recent increase, personal insolvencies still remain 17% below January 2019 before the pandemic.

Tim Sloggett, South West Chair of R3, the UK's insolvency and restructuring trade body, comments on the publication of the January 2024 personal and corporate insolvency statistics for England and Wales:

"On the face of it, the declining year-on-year rate of growth of corporate insolvencies appears to be positive news. However, underpinning this is a decrease in Creditors' Voluntary Liquidations (CVLs) and an increase in administration appointments.

"In recent years the story has been very much a high volume of small companies closing and being placed into CVL. Administrations are more often used with larger companies compared to CVL's, With news that the UK slipped into a recession at the end of last year, this now appears to be feeding through to larger businesses.

In particular, the data shows that the main sectors facing challenges include retail, construction and accommodation and food services with insolvencies in these sectors significantly higher than they were prior to the pandemic, rising 141%, 68.5%, and 119.6% respectively compared to 2019 figures."

Tim, who is a managing director at business advisory firm Quantuma, continues:

"Personal insolvency numbers rose year-on-year. This is not unexpected given the cost of living crisis, but interestingly volumes still remain below levels before the pandemic.

"This may be because the number of Breathing Space processes used also soared to the highest levels since the process was introduced in May 2021, which indicates that this process may be achieving its purpose of providing people with more time to resolve their debt issues and avoid bankruptcy.

"Whilst there are positive signs of lowering inflation, food, fuel, housing and energy costs remain high and are likely to remain key concerns for many households.

"Since the pandemic insolvency practitioners have been given new tools to help rescue businesses. The introduction of the moratorium and restructuring plan help provide businesses with breathing space and an increased chance of restructuring its debts. However, these take time to implement, and anyone worried about their personal or business finances should seek advice as soon as possible. It's such a hard conversation to have, but the sooner you take that step, the more options there are likely to be to rescue the business.

"Most South West R3 members will give a free consultation to prospective clients so they can understand more about their circumstances and outline which options may be best suited to them."