Company insolvencies ease slightly in August

Corporate insolvencies in England and Wales fell slightly in August 2025 compared to the previous month, but remained higher than last year, according to the latest government figures.

A total of 2,048 companies entered insolvency in August, down 1.7% from July’s figure of 2,083. However, the total was 5.9% higher than the same month in 2024, when there were 1,933 insolvencies, and only slightly below the levels seen in 2023, a year that recorded the highest annual number of company insolvencies in three decades.

On a longer-term basis, one in 190 companies on the Companies House effective register entered insolvency between September 2024 and August 2025, equivalent to 52.6 per 10,000 companies. This represents a decline from 55.5 per 10,000 in the previous 12-month period, and remains well below the peak insolvency rate recorded during the 2008–09 recession.

Breakdowns show that August saw 311 compulsory liquidations, 1,600 creditors’ voluntary liquidations (CVLs), 121 administrations and 16 company voluntary arrangements (CVAs). CVLs – often a measure of director-led decisions to wind down companies – accounted for the vast majority of cases.

Meanwhile, personal insolvencies rose by 6.8% in August to 11,348, up from 10,624 in July. Compared with August 2024, the number of individuals entering insolvency climbed by 16.1%, and by more than 32% compared with August 2023.

“Corporate insolvencies have decreased slightly in August 2025 when compared to the previous month, but have increased almost 6% when compared to the same month last year,” he said.

“The trend shows continued high numbers of formal insolvencies, although some way off the peaks of 2023 when pandemic-era problems unwound.”

Russell pointed to the uncertain policy environment ahead of November’s Budget as a major factor weighing on business confidence.

“Until the details are known, it is harder for directors and investors to make investment, recruitment and expansion decisions. This hesitancy has wider economic consequences for growth and productivity, as indicated by the latest disappointing GDP figures for July,” he said.

Inflationary pressures were again pushing up costs, particularly for energy and materials, while high interest rates continued to limit access to affordable finance. Sector-specific strains were also apparent, with construction, retail and hospitality among the hardest hit.

“Construction is struggling, with housebuilding slowing and smaller contractors reporting quieter pipelines… Retail and hospitality also continue to face difficulties, with high staff costs, subdued consumer confidence and no major summer events to boost spending,” Russell added.

He also noted signs of softening in the labour market, with vacancies declining and unemployment edging higher, though without widespread redundancies.

“Employers are often leaving posts unfilled or reducing hours but we are not thankfully seeing large scale redundancy. In some cases, businesses are investing in technology, and utilising AI and automation to ease cost pressures,” he said.