October insolvency statistics – Cashflow pressures driving rising insolvencies, says UK’s largest accountancy firm for SMEs

Nicola Clarke, Restructuring & Insolvency Partner, at Azets, the UK’s largest regional accountancy firm and business advisor to SMEs, comments on the October 2021 company and individual insolvency statistics for England and Wales:
“Corporate insolvencies in October 2021 (1,405) were just 5% lower than pre-pandemic levels in October 2019 (1,480). Whilst corporate insolvencies were relatively static this month, we expect corporate insolvencies to increase as companies continue to experience cashflow pressure due to the surging cost of staffing, energy prices, and raw materials, due ongoing supply chain challenges.
“There was a small increase in the number of compulsory liquidations in October, following the end of the restrictions on winding-up petitions which were lifted on 1 October. It is once again possible to present a winding-up petition where a company has failed to satisfy a statutory demand, and it is no longer necessary to consider the financial effect of Covid-19 on the company. There is a 21 day consultation period prior to submitting a petition so we expect to see an increase in compulsory liquidations next month.
Individual insolvencies
Nicola Clarke, Restructuring and Insolvency Partner at Azets, added:
“There has been a 4% drop in bankruptcies and debt recovery orders from last month and a drop of 44% in bankruptcy orders being made from the same period last year. The biggest reduction is in debtors presenting their own petitions for bankruptcy, which in part may be due to the new breathing space legislation, whereby a debtor can apply for 60 days relief from creditor pressure to try and negotiate with creditors and receive insolvency advice.