Business insolvency rate down slightly in August

British firms seeking insolvency advice might be buoyed by the latest figures from Experian, which show that the rate of corporate insolvencies fell slightly in August.

According to the global information services company's data, the rate of insolvencies in the UK was down to 0.08 per cent in August.

It means the Insolvency Index is at its lowest point since February and could give those trying to avoid a winding up order the incentive they need to deal with their problems and sort out their finances properly by speaking to insolvency practitioners.

However, while, the monthly decrease is a positive sign for UK enterprises, the year-on-year rate is up from August 2010's 0.07 per cent.

This means that one in every 15,625 businesses went into a state of insolvency in the eighth month of this year, compared to just one in every 1428 in August last year.

The figures also showed a year-on-year drop in the financial strength score of UK businesses from 81.06 to 79.18 over the same timeframe.

Despite this, large companies seemed to perform better, with their score improving from 81.06 to 85.91.

This could suggest that small and medium-sized enterprises (SMEs) are most at risk of needing bankruptcy advice.

Bigger companies enjoyed a fall in insolvencies over the 12 months to the end of August this year, with their rate dropping from 0.14 per cent to 0.09 per cent.

However, it was the SMEs employing between 11 and 50 workers that performed worst, with an insolvency rate of 0.21 per cent.

Experian Business Information Services managing director Max Firth claimed that there is still a lot of work to be done in certain areas of the UK.

"While insolvency rates in August were the lowest since February 2011, our analysis shows that regional variances continue to underline the importance of closely monitoring the financial health of the suppliers and customers that companies do business with," he said.

In other news, Credit Action recently reported that, including mortgage debt, the average household owed £55,822 as of the end of September, while the typical UK adult has debts worth just short of £30,000.