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Business insolvency rate `increased more slowly` in 2009

Businesses in the UK did substantially better in 2009, in terms of financial health, according to Experian`s latest Insolvency Index, which also pointed out that `the annual rate of business insolvencies increased at a slower rate` than it had in 2008.

Put together by pH, an Experian company, the Insolvency Index showed that the average `financial strength score` rose steadily throughout 2009, from 79.46 in January to 81.37 in December.

The number of business failures fell sharply in the second half of 2009, after peaking in the first half of the year. Statistics from the Insolvency Service website show that the number of company liquidations in England and Wales reached a high of 4,949 in the second quarter of the year but dropped to 4,716 in the third quarter. (The Insolvency Service has yet to release its official figures for the final quarter of the year - these will be published on 5th February.)

According to pH, the fall in business insolvencies in the second half of the year kept the annual increase in insolvencies down to 12% - far lower than the 29.3% increase seen in 2008. Overall, the insolvency rate in 2009 was 1.25%

"When a business fails," said a spokesperson for the IVA Advisory Centre, "this can have a knock-on effect on a lot of people - not just those who used to work for it, but potentially employees of its suppliers and customers too. The latest business insolvency statistics are by no means good news, but at least they`re moving in the right direction.

"As for personal insolvencies, it`s very worrying that the figures for Q3 reached an all-time high - 35,242 in England and Wales alone, made up of 18,347 bankruptcies, 12,390 IVAs and 4,505 DROs (Debt Relief Orders). We won`t know any more about 2009`s official figures until 5th February, when the Insolvency Service publishes its statistics for the final quarter of the year."

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The IVA Advisory Centre are a licensed Insolvency Practice, offering free debt advice as well as IVAs and a comprehensive range of other debt solutions. If you are in debt and would like to explore your options, contact one of our advisers today.

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