Chris Horner

The firm has analysed data from the past 12 months to reveal the Year of Lockdown report, which reveals the state of businesses, the liquidation rate and the sectors and regions most likely to undergo an insolvency event.

The research shows that 1 in 274 firms were likely to undergo an insolvency event in 2020. The figures show that a business in the Yorkshire and Humber region of England was statistically most likely to undergo an insolvency event than in any other region (1 in 115) while a company based in Northern Ireland would be least likely (1 in 506).

The total number of corporate insolvencies actually fell in 2020, to their lowest recorded levels since 2007. The main reasons are the variety of Government-backed CCOVID-19 support measures.

There have been 8,205 company insolvencies across the UK from March 2020 to January 2021. UK firms in the Construction sector saw the most insolvencies, with 1,634, those in hospitality followed suit with 1,378 and firms in the UK’s retail sector experienced 1,355 insolvencies.

The administrative and support sector saw 1,200 insolvencies, while manufacturing suffered 930 and all other sectors saw a total of 1708.

Chris Horner, insolvency director with Business Rescue Expert, said: “Ominously, even with restrictions being lifted and economic activity rising, 2021 will be a worse year for insolvencies in several industries than the year of lockdowns was. Government support in the form of backed loans, furloughs and the temporary ban on winding-up petitions and other creditors actions are all expected to end sometime in 2021.

“Bounce Back Loan repayments and others will begin to come due, businesses will have to decide if they can re-employ or redeploy their furloughed workers and creditors that have been under severe financial pressure themselves will finally have the ability to look for repayments that might be critical to their own survival.”