Rise in insolvencies across the Thames Valley as impact of Coronavirus hits home
That's according to figures from R3, who specialise in restructuring and insolvency across the Thames Valley.
The figures for September reveal a month-on-month rise in both personal and corporate insolvencies although the numbers remain down on the same period last year.
· Corporate insolvencies increased to 926 in September 2020 compared to August's figure of 784, but remained well below September 2019's figure of 1,513.
· Personal insolvencies increased to 7,450 in September 2020 compared to August's figure of 6,372, which is well below September 2019's figure of 12,256.
Garry Lee, chair of insolvency and restructuring trade body R3’s Southern and Thames Valley region, said: “The situation remains worrying for both businesses and consumers.
"These results show that the toll the COVID-19 pandemic is taking may be starting to be felt in the official insolvency numbers, although the Government's support measures have reduced the size and scale of the initial impact.
"Despite the increases, the figures are still lower than pre-lockdown levels of insolvency and don't fully reflect the health of businesses and the economy in the way they would normally.
“As a number of the Government's temporary insolvency measures have recently been extended and plans to continue supporting COVID-hit businesses and individuals have been announced, it's likely this trend of unrepresentative insolvency statistics will continue for some time.”
The rise in overall corporate insolvencies was driven by an increase in the number of Creditors’ Voluntary Liquidations and a notable uplift in the number of Company Voluntary Arrangements (CVAs).
On the personal insolvency side, numbers increased across the board with more people using Debt Relief Orders (DROs), bankruptcies and Individual Voluntary Arrangements (IVAs).
Garry, who is an Associate Director in the recovery and restructuring services department at accountancy firm Smith & Williamson in Southampton, added: "It's likely that directors and owners of businesses in Bucks, that would have remained profitable had COVID not happened, will start seeing signs that their businesses are struggling, possibly for the first time ever.
“We would urge them to seek advice as soon as these signs appear. The earlier you seek advice, whether that's about your personal or business finances, the greater number of options you have to turn the situation around.
"The majority of R3 members will offer a free, confidential initial consultation to people who are after help with their personal or business finances and want to explore their options or understand how they might be able to resolve their situation."