Company insolvencies in the UK have reached their highest level since 2012, according to the latest data from the Department for Business, Energy and Industrial Strategy.
During March and April, an average of 70 companies were made insolvent each day, 40 per cent higher than pre-pandemic levels and more than double the rate during the first year of the pandemic.
Insolvencies fell sharply during the pandemic as the government introduced temporary protections for financially vulnerable companies and provided support, including through the Bounce Back Loan Scheme. In total, the government lent £80bn to 1.6 million businesses.
Support has been reduced over the past year. The furlough scheme ended in September 2021, at the same time that the temporary insolvency protections for businesses were cut back. Those protections were then removed entirely at the end of March.
It was hoped that by the time support ended, companies would be boosted by a resurgent economy. Instead, with soaring energy costs and disrupted global supply chains, many businesses have been unable to stay afloat. Business closures also reached record levels during the first quarter of 2022 – 65 per cent higher than during the first quarter of 2019, according to the Office for National Statistics.