ONS report highlights a potential flood of insolvencies in months to come
New official figures from the Office for National Statistics (ONS) has revealed that as many as two-thirds of UK businesses may be at risk of insolvency.
In the latest Business Impact of Coronavirus Survey (Bics) from ONS, 64 per cent of businesses across all industries said they were at risk of insolvency last month.
Of those, around 43 per cent revealed that they had less than six months’ cash reserves to survive on.
The survey, conducted before the new national lockdown, paints a picture of potential insolvencies in the months to come across the UK.
Looking in further detail at the most recent Bics report, accommodation and food service industries and the administrative and business support industries had the highest percentages of businesses at severe risk of insolvency (17 per cent and 9 per cent respectively).
The official figures mirror other recent research, including the Red Alert report, which found 557,000 businesses were under severe strain after government restrictions hit sales.
It also showed that across all sectors there has been a nine per cent jump in the number of companies in significant distress since March, equivalent to around 63,000 firms.
It is hoped that extensions to the existing COVID-19 temporary insolvency rules, including the suspension of wrongful trading, will work alongside the Government’s other financial support measures to limit the number of insolvencies.
If you know a business that is in distress due to the financial impact of COVID-19, why not find out how our experienced team of business recovery and insolvency specialists can help bycontacting us.