By Daniel Hunter

The number of businesses that entered administration in 2014 fell to a 10-year low, according to the Insolvency Service.

Just 1,790 businesses collapsed last year. It was a 24% drop on 2013 and the lowest figure since 2004.

The number of receivership, the other main form of insolvency, fell by 21% to 724, the smallest number since 2007.

The Insolvency Service said: "In total, individual insolvencies have generally been on a decreasing trend since 2010."

Matthew Chadwick from accountants BDO said it was no surprise.

"Individuals and households are benefitting from increasing competition for mortgages, a rebounding jobs market, a nascent supermarket price war, falling petrol prices and energy tariffs and stalling consumer inflation," he said.

"However as the economy grows, creditors may be emboldened to collect old debts, and some consumers will once again overreach themselves."

Brian Johnson, insolvency partner at chartered accountants HW Fisher & Company, said: "So far, so good. With the UK economy firmly back in gear - and set to overtake Germany in the global growth league - the number of business casualties is falling steadily.

"But a few warning lights remain stubbornly on. While company liquidations are thankfully back down to pre-crisis levels, seven years of pain mean some sectors remain very fragile.

"Many SMEs who supply large firms are being forced to accept ever longer payment terms for their work, especially in the construction and retail chain sectors.

"This is putting a severe strain on cash-flow for businesses that are already under pressure. Construction - which bore the brunt of the recession more than most - contracted by 1.8% in the last quarter of 2014. With many construction firms already barely surviving on very low margins, this is a real worry."

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