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Business insolvencies continued to fall in 2015 to reach their lowest level since 1989, according to Insolvency Service figures released today. They show that 14,629 companies became insolvent during the year, which is 10 per cent fewer than the previous year.

According to the UK insolvency trade body R3, low oil prices and low interest rates have contributed to the fall in insolvencies, along with a significant drop in the number of winding up orders by HMRC and other creditors. The number of companies liquidated in this way fell by 23% to 2,874, the lowest rate for over 30 years.

The figures also reveal the five sectors with the highest number of insolvencies in recent years – construction, retail and wholesale, administrative and support services, food and hospitality, and manufacturing. From the start of 2012 to the end of September 2015, these sectors accounted for over 60 per cent of all instances. A detailed sector breakdown is not available for the fourth quarter of 2015.

Richard Wolff, North West chair of R3 and Head of Corporate Recovery and Insolvency at JMW Solicitors LLP, said: ““Corporate insolvencies are continuing their slow and steady decline since their peak in the recession.

“The falling price of oil has helped businesses to bring costs down. However, it is causing difficulty for those in the energy sector, where many businesses are currently undergoing restructuring, and if they are unable to cut costs sufficiently we may see a wave of insolvencies in the sector in the future.

“Other businesses are continuing to enjoy favourable economic circumstances such as historic low interest rates and inflation. There has been reasonable growth in the economy and high levels of liquidity. However, these factors won’t continue indefinitely. Increasing volatility in the stock markets, lower growth in the developing world and geopolitical risk in the Middle East all contribute to uncertainty and lower confidence amongst corporates which may well impact on growth.”

Meanwhile the number of individual insolvencies in 2015 dropped by 19% to below 80,000, their lowest level since 2005. The fall was driven by a drop in the number of IVAs which made up half the total.

Richard Wolff added: “Continuing low inflation and a growing economy have helped people pay down or service their debts. The return of real wage growth has put a big dent in insolvency numbers. Overall, personal finances are in a better shape than they have been for a while.

“However it is very important that the government starts recording the number of debt management plans in operation, which currently do not show up in the official figures. Without knowing how many people are using them, we have no idea of the true scale of personal insolvency.”