With great investment comes great responsibility, which, unfortunately, can easily result in debt. Recent reports reveal that insolvencies for UK businesses have surged and are likely to worsen under the stress of inflation, whilst the effects of rising living costs are causing significant financial strain.
UK insolvencies are rising and could climb further as soaring inflation and the withdrawal of pandemic-related stimulus causes cracks in the economy to deepen, shares Bloomberg. Data published by Insolvency Service for March 2022 reported a significant increase in insolvencies for the month - 34% more than 2019, which also suffered from around 1,600 reported cases.
Government measures to help businesses through the pandemic, from the furlough scheme to VAT payment deferrals and state-backed loans, kept insolvencies artificially low. But, with the support withdrawn, businesses are left with the realisation that they can’t survive on their own. This was only heightened when, in March, UK inflation surged to a 30-year high of 7%, adding pressure on businesses and intensifying the cost-of-living crisis that threatens to derail their recovery.
According to insurance provider LV=, a third of people are saving less to get by, with 8% taking on more debt and 5% asking friends or family for financial help, following an increase in living costs. Moreover, 13% of those with extra living costs are struggling to pay for heating and 10% are finding it difficult to pay for food, according to the research involving around 4,000 people.
An increase in activities post-pandemic combined with surging living costs has put a strain on incomes. 30% of respondents said they are having fewer holidays and meals out whilst 19% have cancelled subscriptions to make ends meet.
Clive Bolton, managing director of savings and retirement at LV= said, “One of the big issues people now face is how to also protect the future spending power of their savings being eroded by rising prices.”
At Breal CM, we’re experts in collecting business debt efficiently and effectively in line with agreed credit management strategies, without compromising client relationships. By combining advanced technologies, white label services and 20 years of expertise in delivering tailor-made solutions for clients, we’re able to successfully support businesses on their journey to recovery.
To find out how our expert knowledge and debt recovery solutions can grant your business financial freedom, call 0330 0430282 or simply email us at info@BREALCM.com.