Insolvency Service sees rise in administrations

An increase in administrations has been recorded in England and Wales over the last quarter.

There have been some mixed figures regarding the UK economy of late, but the data for the first three months of the year from the Insolvency Service reveals that insolvency and administrations are still problematic.

In fact, there has been an increase in the number of company insolvencies, which rose to 4,303 in total for the three-month period. This represents a 0.2 per cent increase on the previous quarter and a 4.3 per cent rise on the same period in 2011.

Meanwhile, in the 12 months to the end of the quarter, approximately 0.7 per cent of all active registered companies went into administration – a figure which has not changed from the previously quarter.

Charles Turner, vice-president of the Insolvency Practitioners Association, told the BBC that there could be more trouble on the horizon: “More sole traders and partnership businesses [are] seeking advice on debt issues as they struggle to cope with the recession," he said.

"There remains real concern about the prospect of a new wave of personal insolvency casualties with many consumers facing further challenges to their household budgets, not least from rising mortgage costs."

The news follows reports that the UK's GDP contracted for a second consecutive quarter during the first three months of the year. In the fourth quarter of 2011 GDP shrank by 0.3 per cent, while in the first quarter of this year it fell by 0.2 per cent.

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