The impact of Brexit on business and personal finances: Views from R3 members
In November 2016, R3 (the UK’s insolvency and restructuring trade body) surveyed its members for their views on the impact of Brexit on business and personal finances. In general, members believe that businesses are more likely to be adversely affected by Brexit than individuals. The survey found:
Impact on business finances
- 72% of R3 members believe the outcome of the EU referendum will lead to an increase in corporate insolvencies in the next 12 months. 76% think a ‘hard’ Brexit would increase corporate insolvencies – including 35% who think it would lead to a ‘significant’ increase in insolvencies. 39% think a ‘soft’ Brexit would have no impact on insolvency numbers, while 38% think this scenario would see insolvencies rise (only 1% say ‘significantly’).
- 55% feel that the referendum has already had a negative impact on business finances. Just 10% think it has had a positive impact on businesses’ finances.
- 61% of members have seen no change in the number of businesses seeking advice since the referendum, but almost a third (30%) have seen an increase (over three-quarters of this group say the referendum result is a factor in the increase). Overall, 45% of respondents say the referendum result has been mentioned by businesses seeking advice since June.
- Asked to select up to three sectors most likely to be hurt by leaving the EU, most survey respondents picked the manufacturing (44% of respondents), financial services (41%) and retail (33%) sectors.
Impact on personal finances
- 46% believe there will be a post-vote increase in insolvencies; 41% believe there will be no change. 60% think a ‘hard’ Brexit would increase personal insolvencies, whilst 33% believe a ‘soft’ Brexit would.
- 50% feel that the outcome of the vote had no impact on individual’s personal finance; 43% believe there has been a negative impact.
- 85% of members have seen no change in individuals seeking advice since the referendum; 9% have seen an increase.
Comment from R3 President Andrew Tate
“The insolvency and restructuring profession is concerned about the impact leaving the EU will have on the financial health of UK businesses. Even before leaving, the effects of ‘Brexit’ are being felt: a weaker pound and increased business uncertainty are already causing problems.”
“Insolvency practitioners are on the frontline when it comes to supporting struggling businesses, and a significant minority say they have seen an increase in businesses needing help since June. ‘Brexit’ is frequently coming up as an issue when businesses seek advice.”
“The uncertainty around what final form ‘Brexit’ will take makes it difficult for businesses to plan ahead and assess what risks and opportunities they have.”