According to the latest government statistics, the number of registered company insolvencies across the UK has decreased to 23,872, reflecting a reduction of 5% compared to 2023.
Stephen Goderski, Partner at restructuring and insolvency firm PKF Littlejohn Advisory, notes that while a decline in insolvencies is welcome news, businesses are not out of the woods yet.
He states: “A reduction in insolvencies is encouraging, but the real challenge is what lies ahead. With national insurance contributions set to rise in April, businesses will see their payroll costs increase, putting further strain on cash flow at a time when many are already stretched. The question is whether the government’s economic strategy will provide the stability and support businesses and SMEs need or whether uncertainty will continue to dominate the landscape.
“Larger businesses and SMEs remain vulnerable in this environment. Although some relief is coming, businesses are still waiting for clear signs of sustainable growth and improved trading conditions. If uncertainty lingers, there is still a risk that insolvencies could rise again in the months ahead.”
Stephen emphasises the importance of maintaining this momentum by continuing to act swiftly when financial difficulties arise: “Proactive measures, such as seeking professional advice and reassessing financial strategies early and often can significantly enhance the chances of long-term viability. For small and medium-sized enterprises (SMEs), this approach is vital to ensure their role as the backbone of the UK economy remains strong.”