Company insolvencies rise month-on-month in February

The number of company insolvencies in England and Wales increased in February 2026 compared with the previous month, although levels remained below those recorded a year earlier, according to the latest data from The Insolvency Service.

A total of 1,878 registered company insolvencies were recorded in February, up 7% from January’s 1,749 but 7% lower than February 2025, when 2,015 companies became insolvent. The figures also indicate that insolvency levels at the end of 2025 and the start of 2026 were generally lower than those typically seen between 2022 and 2025.

The majority of cases continued to be creditors’ voluntary liquidations (CVLs), which accounted for 1,473 insolvencies in February. There were also 249 compulsory liquidations, 146 administrations, and 10 company voluntary arrangements (CVAs). No receivership appointments were recorded.

While the number of CVLs rose compared with January, it remained below the average monthly level seen during 2025. Compulsory liquidations were also lower than both February 2025 and the 2025 monthly average. Administrations and CVAs both declined compared with January.

On a longer-term basis, the data shows one in 194 companies on the Companies House effective register entered insolvency in the 12 months between 1 March 2025 and 28 February 2026. This equates to 51.5 insolvencies per 10,000 companies, slightly down from 52.3 per 10,000 in the 12 months to February 2025.

Although insolvency rates have risen from the historically low levels seen during the pandemic years of 2020 and 2021, they remain significantly below the peak recorded during the 2008–09 financial crisis, when the rate reached 113.1 insolvencies per 10,000 companies. The lower rate today partly reflects the fact that the number of companies registered in the UK has more than doubled since that period.

“The latest insolvency data paints a worrying picture for UK SMEs, despite a slight easing in the annual trend,” he said. “The rise in CVLs highlights the ongoing cashflow pressures facing small businesses. Many viable businesses remain under significant strain from inflationary pressures, higher borrowing costs and reduced consumer demand.”

Davison said voluntary liquidations can often indicate that directors have exhausted other options to keep their businesses operating.

“At Purbeck, we are particularly concerned about the increase in voluntary liquidations, which often indicate that directors feel they have exhausted all refinancing or turnaround options,” he said. “With the number of compulsory liquidations also sitting below last year’s levels, it is clear that directors themselves are choosing to close their companies before matters escalate further.”

He added that the current economic environment is leading many business owners to focus more closely on managing their personal financial exposure when raising finance.

“Demand for personal guarantee insurance continues to be strong, as owners look for ways to manage the personal financial exposure that accompanies new lending,” Davison said. “In the current environment, directors are trying to balance the need to fund their business with the risk of personal liability should the business fail.”

Davison also urged companies experiencing financial difficulties to seek support sooner rather than later.

“We urge SMEs to seek early advice – whether from lenders, advisers or specialist providers – before financial pressures become unmanageable,” he said. “The earlier support is sought, the better the chances of stabilising the business and protecting both the company and its directors.”