Insolvencies fell to two-year low in February
The number of company insolvencies last month stood at 686, the lowest monthly number recorded since January 2019.
Figures released by the government’s Insolvency Service found the number of company insolvencies in February 2021 was 49 per cent lower than the same month in the previous year.
February 2020 marked the month before the UK entered its first national lockdown, and government coronavirus support schemes, like the furlough scheme, were yet to be implemented.
Since March 2020, the overall number of registered company insolvencies in each month has been lower than the corresponding month of the previous year in 10 out of 11 months.
In an interview yesterday with Morning Wire, Begbies Traynor executive chairman Ric Traynor warned the worst was yet to come when it came to insolvencies, as government support schemes had been artificially keeping afloat companies that otherwise would not have survived the year.
Traynor said there will likely to be an uptick in insolvencies from September 2021 onwards, when government support schemes come to an end.
“Those businesses that have been protected and still have fundamental problems are going to face formal insolvency, and that’s why we expect the number of insolvencies to increase over the course of the next year or two,” he said.