2010 saw the annual rate of business insolvencies fall for the first time in two years, according to the latest Insolvency Index from global information services company Experian. 

The index reveals 1.04% of UK businesses failed in 2010, compared to 1.25% in 2009, the first annual drop for two years.  Total insolvencies dropped from 24,209 in 2009 to 19,946 in 2010 - an 18% drop.

March 2010 witnessed the highest number of insolvencies when 0.11% of the total business population failed. However, from March, the failure rate saw a general improvement, hitting an annual low of 0.07 per cent in August and again in November. 

Max Firth, MD of Experian PH, says: “2010 has been a period of relative stability for business insolvencies and the improving trend in the insolvency rate has been positive.  This contrasts significantly to the last major recession of the early 1990s when the rate escalated over a long period and peaked even as the country came out of recession. 

“Insolvency trends in 2010 included a North-South divide, with firms in the South of England faring better, as well as a reversal of fortunes for the largest companies. Taken as a whole, those with more than 500 employees were not as resilient as they were in 2009. This demonstrates how quickly circumstances can change and how important it is for all firms to monitor the performance of other businesses they deal with to fully understand the impact they could have on them if they failed.”