The year ended with December seeing 0.08 per cent of businesses fail, according to a study by information services company Experian.
This compares to 0.11 per cent in the same month during 2011 and represents the lowest rate seen in December since 2007.
The insolvency rate remained broadly flat (between 0.25 and 0.27 per cent) in each quarter throughout the year, a slight improvement on 2011, when the range was between 0.26 and 0.29 per cent.
The greatest improvement in the rate of insolvencies was seen by firms with 51-100 employees with their insolvency rate falling from 2.22 per cent in 2011 to 1.83 per cent in 2012.
This is followed closely by firms with 26-50 employees whose insolvency rate fell to 2.21 per cent, from 2.59 per cent in 2011 and firms with 11-25 employees, where the insolvency rate dropped from 2.60 per cent in 2011 to 2.35 per cent.
The only significant year-on-year increases in the rate of insolvencies came from the largest firms. All those with over 500 employees saw an increase from 1.46 per cent in 2011 to 1.61 per cent in 2012.
In addition, micro firms with 1-2 employees also saw a slight increase in insolvencies from 0.71 per cent to 0.73 per cent.
Max Firth, managing director, of Experian Business Information Services says that, in particular, firms that suffered most during the downturn were the ones to see the most significant improvements.
‘The rate of insolvencies is significantly lower now than when it was at its peak in 2009 at 1.25 per cent, but there is still a way to go before we reach the pre-recession rate of 2007, which stood at 0.97 per cent.
‘This is highlighted by the slight increase in insolvencies amongst larger businesses – which highlights the need for businesses to stay alert to changes which may affect them. Ongoing monitoring of all clients and suppliers regardless of size is essential, as the impact of larger corporate insolvencies can be felt down the supply chain.’
Insolvency figures have shown improvements in a number of areas, with the biggest improvements coming from the North West, Wales and the West Midlands.
Scotland had a good year in 2012, with the rate of insolvencies dropping by more than a third in Q3 of 2012 to 0.18 per cent then again in Q4 to 0.11 per cent, resulting in an annual figure of 0.86 per cent – the lowest rate for Scotland since 2010.
Of the UK’s five largest industries – business services, IT, property, construction and the leisure and hotel industry – the IT sector was the only one that saw signs of a difficult year, with insolvency rates up to 0.74 per cent in 2012, having held its annual insolvency rate at 0.65 per cent since 2010.
