Half a million UK businesses in 'significant financial distress'
The number of businesses in the UK that are in ‘significant financial distress’ has risen to 494,000, according to research from insolvency firm Begbies Traynor.
UK businesses in financial distress - Q4 2019 statistics
New research from insolvency firm Begbies Traynor has revealed that the number of businesses in ‘significant financial distress’ has risen to 494,000, with the real estate and property, support services, construction and retail sectors especially affected.
Begbies Traynor defines 'significant financial distress’ as when a company has county court judgements of less than £5,000 filed against them. The latest Red Flag Alert data for Q4 2019 found that:
- the number of businesses in significant financial distress now stands at 494,000
- significant financial distress rates are highest amongst companies registered since 2014
- the number of businesses in significant financial distress has risen by 81% since the start of 2016
- the number of real estate and property businesses in significant financial distress has risen by 13% in a year to 53,000
UK businesses in financial distress by sector
Across the 22 sectors monitored by the Red Flag Alert research, 15 sectors witnessed increases in significant financial distress between the third and fourth quarter of 2019, compared to 13 out of the 22 sectors between Q4 2018 and Q4 2019. This indicates that Q4 2019 saw the broadest rise in financial distress.
The sector most badly affected was the real estate and property sector, with a 13 per cent increase in the number of businesses in significant financial distress between Q4 2018 and Q4 2019. This represented the highest year-on-year percentage increase across any sector measured in the latest Red Flag Alert research.
Following a less than fortuitous Christmas period, there was also a 2 per cent increase in the number of retailers in significant distress since Q4 2018. Online retailers also suffered, with an 8 per cent year-on-year increase in the number facing significant financial distress.
See also
Gazette notices in 2019 by numbers
How insolvency affects companies in the construction sector
Gratuitous alienations, good faith and adequate consideration under the Insolvency Act 1986
SMEs with female board members are less likely to go insolvent research shows
Image: Getty Images
Publication date: 28 January 2020