Company insolvencies fall 10% year-on-year in June

Company insolvencies in England and Wales fell by 10% year-on-year in June, according to the latest figures from The Insolvency Service, prompting cautious optimism that business distress may be beginning to stabilise despite continued economic headwinds.

A total of 1,845 registered company insolvencies were recorded in June 2026, broadly unchanged from 1,849 in May but down from 2,048 in June 2025.

The monthly total comprised 276 compulsory liquidations, 1,364 creditors’ voluntary liquidations (CVLs), 191 administrations and 14 company voluntary arrangements (CVAs). There were no receivership appointments.

Creditors’ voluntary liquidations, the most common form of corporate insolvency, fell by 3% compared with May and were 15% lower than a year earlier. Compulsory liquidations also declined, falling 2% month-on-month and 15% year-on-year.

Company voluntary arrangements recorded the sharpest monthly decline, dropping 44% from May, while administrations increased by 45%. The Insolvency Service said the rise in administrations was largely driven by around 60 connected companies in the real estate sector entering administration during the month.

Over the 12 months to 30 June 2026, one in every 198 registered companies entered insolvency, equivalent to 50.5 per 10,000 companies. This represented a slight improvement from the rate of 52.4 per 10,000 recorded in the previous 12-month period.

Although insolvency rates remain above the exceptionally low levels seen during 2020 and 2021, they are still significantly below the peak of 113.1 per 10,000 companies recorded during the 2008-09 financial crisis, reflecting the substantial growth in the number of registered businesses over that period.

“While insolvencies are lower than this time last year, it’s not clear if this is a blip or a genuine reversal of the wider macroeconomic trend of rising distress,” she said. “However, CVAs falling by 44%, coupled with liquidations down 2% month on month and 15% year-on-year, is a reassuring sign that we could be seeing stabilisation in the market. Though administrations have significantly increased, this appears to be largely due to a large group of connected companies.”

Garrett noted that, as the figures mark the end of the second quarter, they provide an important snapshot of business health but cautioned against reading too much into a single month’s data.

“It is only one month and a single data point, so while it marks a departure in the trend to date, it is too early to call if this is a pivot point or simply a punctuation in the steadily increasing trend in insolvencies in recent times,” she said.

Looking ahead, she said attention would turn to how businesses perform over the summer months.

“Businesses have managed to trade sufficiently to make it through the first half of the year. The next data point to watch will be the September figures, which will show how trading has fared over the summer, or whether businesses will have been forced to discount too heavily.”

Garrett also warned that many of the underlying pressures facing businesses remain firmly in place.

“The recent causes of distress remain in place and appear set to continue to grind on. While interest rates haven’t risen yet, if they increase, so will insolvencies. If the conflict in the Middle East impacts supply chains or prompts further rises in energy costs, then we can expect to see more businesses will go under.”

She added that movements in currency markets could also influence business performance, with a stronger pound benefiting some companies while creating additional challenges for exporters.

“This may just be a pause before insolvencies resume their upwards march, but if we see more months like this, then there may be cause for a bit of optimism. Certainly an interesting one to watch.”