Insolvencies will inevitably return to pre-pandemic levels
Matt Richards and Louise Brittain, restructuring and insolvency partners at Azets, the UK’s largest regional accountancy and business advisors to SMEs, comment on the April 2021 corporate and personal insolvency statistics for England and Wales.
Corporate insolvencies
Matt Richards, restructuring and insolvency partner at Azets: “The number of insolvencies in April (925) was 7% below March (992) and 23% below April 2020 (1,199) and 35% below April 2019 (1,429). We expect this trend of low corporate insolvency numbers to continue into May and June while government support schemes remain available. However, the tide is likely to turn soon.
“While it remains uncertain exactly when the number of insolvencies will increase, it is inevitable that they will return to at least pre-pandemic levels in the future.
“Now that the lockdowns are easing and a number of businesses that have been closed for most of the last 12 months are allowed to reopen, we expect that more businesses will need to carefully consider what future funding they will require if sales do not quickly return to pre-pandemic levels. Insolvency levels will rise when that funding is no longer readily available through the government schemes and creditors are once again able to enforce their rights.”
