The annual figures, published by the Insolvency Service, is much lower than the pre-pandemic level which recorded 17,196 overall company insolvencies in 2019.

In 2021, there were 475 compulsory liquidations which is down 85% from last year which recorded 1,353. The Insolvency Service stated that 90% of insolvencies in 2021 were creditors’ voluntary liquidations (CVL) recording 12,661 which is a third higher than 2020 and the highest annual number since the financial crisis in 2009.

The Insolvency Service stated that the increase ‘coincided with the phasing out of measures put in place to support businesses during the coronavirus pandemic’.

Colin Haig, president, R3, and head of restructuring at Azets, said: ‘The increase this year and the surge in creditors’ voluntary liquidations in the final quarter of 2021 suggests that many directors are opting to close their businesses as they lack confidence in their trading prospects in the current climate. And while insolvencies still haven’t reached pre-pandemic levels, this is unlikely to remain the case for long.’

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