The number of company liquidations in England and Wales increased from 3,635 in Q2 2008 to 5,055 this year, representing 1,457 compulsory liquidations and 3,598 creditors voluntary liquidations.
Q1 2009 compared to Q2 increased 2.9 per cent from 4,914 compulsory and voluntary liquidations.
Individual insolvencies increased 27.4 per cent in Q2 this year to 33,073 from 25,966 last year.
An Association of British Insurers spokesman says: “The latest insolvency figures are alarming. They are particularly bad news for suppliers who are unsecured creditors, as it’s likely they will herald an increasing number of pre-pack administrations, in a year which has already seen a record number.”
According to the ABI a pre-pack enables an insolvent company to be sold straight after it enters administration, often trading under the same name and with the same management, but with unsecured creditors highly unlikely to recoup any of their losses.
The spokesman adds: “A system designed to promote corporate survival and employment risks preserving large companies, at the expense of their smaller suppliers, potentially leading to more jobs lost than saved. The ABI is calling for significant reform to the way pre-packs are regulated.”
Grant Thornton personal insolvency partner Mike Gerrard says: “The level of unemployment undoubtedly has an effect on the insolvency statistics but we haven’t seen the full impact yet.
“It is clear that the level of personal insolvencies will continue to rise even when the economy begins to pick up and there is going to be a definite recession hangover effect that will last for some time.”