In total, 14,040 businesses entered liquidation in 2014. This represents a drop of 6.3% on the previous year when 14,990 businesses were liquidated.
Since 2011, there has been a decreasing trend in company liquidations. Last year’s total is also the lowest number of liquidations since 2007 when just 12,507 companies entered liquidation.
It was a similar story for personal insolvencies. Last year, 99,196 people were declared insolvent either through bankruptcies, debt relief orders (DROs) or individual voluntary arrangements (IVAs).
Indicating a 1.8% decrease when compared to 2013 figures, the number also represented the lowest level of personal insolvencies since 2005.
Interim chief executive of the Insolvency Service Graham Horne said, “Today’s figures show the lowest number of personal insolvencies for some years.
“It is also good to see that more debtors have been able to reach agreements with those to whom they owe money through the use of IVAs.
“Corporate insolvencies have also dropped, especially the number of administrations, which are at their lowest since 2004.”
Commenting on the news was Mark Sands, a personal insolvency partner at accountancy firm Baker Tilly, who explained that the drop in insolvencies could be due to low interest rates and improved creditor-debtor relations.
He said, “In a sense, conditions for those with problem debts couldn't be better.
"Interest rates are at historic lows, we know that they're going to stay at that level for longer than we originally thought, and creditors are increasingly willing to engage with debtors to agree informal repayment plans over formal insolvency procedures."