BUSINESS insolvencies have reached their highest quarterly figure since the pandemic began, with some company directors deciding future success is “unlikely”, it is claimed.

Bosses have been urged to watch for signs that their business might be distressed and to seek help early.

Figures from the insolvency Services for the third quarter of this year showed 3,765 corporate insolvencies, seasonally adjusted – up 16.7 per cent on the previous quarter and up 43.5 per cent on last year.

The seasonally adjusted figure for individual insolvencies stood at 26,758, a fall of 1.8 per cent on the previous quarter but up 32.5 per cent year-on-year.

Garry Lee, chair of the insolvency and restructuring trade body R3’s Southern and Thames Valley region, which includes Hampshire, said: “Corporate insolvencies have risen to the highest quarterly figure since the pandemic began – a sign that the economic damage of the pandemic is translating into higher levels of corporate insolvency.

“The increase we’ve seen in the latest figures has been driven by a rise in Creditors’ Voluntary Liquidations, to the highest quarterly total in 12 years.

“This would suggest that company directors are choosing to close their businesses after trading for more than a year and half during a pandemic and deeming future success unlikely.”

Mr Smith, an associate director in the recovery and restructuring services department at accountancy firm Smith & Williamson’s Southampton office, added: “Over the last three months, businesses have faced a perfect storm of rising energy prices, labour market and supply chain issues, coupled with the winding down and withdrawal of the government’s support measures.

“In addition to this, consumer spending and confidence declined over the late summer and early autumn as people worried about their finances and the future of the economy, and cut back on their spending as a result.

“As we enter the winter months, directors need to be alert to signs their business might be distressed, which include cashflow issues, problems paying staff or suppliers and increasing stock levels, and seek advice as soon as any of them present themselves, or if they become worried about their business and its finances.

“We know how hard it is to talk about your money worries, but having that conversation with a qualified and regulated advisor before your problems spiral gives you more potential solutions and more time to take a decision about which of these is best for you.”