Company insolvencies stay near record highs in 2025

New figures from The Insolvency Service show that company insolvencies in England and Wales remained at historically elevated levels in 2025, with 23,938 firms becoming insolvent – virtually unchanged from 2024.

The total included 18,525 creditors’ voluntary liquidations (CVLs), 3,730 compulsory liquidations, 1,495 administrations, and 186 company voluntary arrangements (CVAs) and two receivership appointments.

While voluntary liquidations dipped slightly, compulsory liquidations rose to their highest annual level since 2012, signalling tougher action from creditors. Despite numbers comparable to the 2008–09 recession, the insolvency rate remains lower due to a much larger business population.

In December, company insolvencies fell to 1,671, down 10% from November and 13% from the previous year. CVLs dropped to their lowest level since August 2021, and compulsory liquidations, administrations and CVAs all declined month on month.

Commenting on the data, Tom Russell, President of the restructuring and insolvency trade body R3, said the statistics highlight “continued financial strain” across the economy.

“Corporate insolvencies in 2025 remain at historically high levels with nearly 24,000 businesses becoming insolvent,” he said. “Difficult trading conditions, high overheads and the impact of the national insurance rise weighed heavily on businesses last year.”

Russell noted that creditors are increasingly turning to compulsory liquidation to manage their own financial pressures, and warned that easing inflation has yet to translate into meaningful recovery for vulnerable firms.

“The lasting effects of elevated costs, restricted access to finance and subdued customer demand continue to stretch cashflow, particularly for smaller and mid-sized firms,” he added.

Business confidence remains weak, with sentiment sitting at a three-year low, according to the Institute of Chartered Accountants in England and Wales.

Construction remained the most distressed sector, with 3,950 insolvencies, representing 17% of all cases. Housebuilders are bracing for another difficult year amid stagnant growth and rising costs. Retail and hospitality remained the second and third most distressed sectors, respectively.