The insolvency rate in 2024 remains below the 20-year average, with a lower number of insolvencies than expected.
The insolvency rate remains below the 20-year running average, with considerably less insolvencies last year than was expected. While there were 852 insolvencies in 2024 - an increase of 16% - this was below the expected number of 900. spokesperson for professional services firm PwC Ken Tyrrell said that while the overall number of insolvencies is up, certain quarters were lower than the previous year.
“Versus 2023, it was up 16% - but what was interesting was at the end of Q3, that had been up 34% on the year before,” he said. “Q4 figures are actually a bit lower – they're 20% lower than 2023, which is the first time that’s happened in a couple of years.”Mr Tyrrell said this could be a sign that average long-term insolvency rates are dropping. “If we look back over 20 years, the average insolvencies per 10,000 companies is 50 – at the moment, we’re 29 per 10,000,” he said. “In real terms there were 852 insolvencies last year, if we’re at the long-term average, that’ll be closer to 1,500.”According to Mr Tyrrell, the number of liquidations and small company rescues are also down last year. “Last year, there was 30 Small Companies Administrative Rescue Process’s (SCARP’s) initiated during 2024 - that was three lower than the year prior,” he said.‘So, the general preference is for companies that are facing insolvency to go for liquidation, primarily down to profitability.”“It would have been expected to be a lot higher,” he said.According to Mr Tyrrell, recent PwC research shows that the average age of companies that filed for insolvency last year was 13 years old
INSOLVENCY ECONOMY BUSINESS FINANCE COMPANY FAILURES
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