Business insolvencies fall 10%

Latest figures from the Insolvency Service have shown that the number of business insolvencies in England and Wales has shown that there were 1,845 business insolvencies in June 2026,. The figures were similar to in May 2026 but 10% lower than in June 2025.

The business insolvencies in June 2026 consisted of 276 compulsory liquidations, 1,364 creditors’ voluntary liquidations (CVLs), 191 administrations and 14 company voluntary arrangements (CVAs). There were no receivership appointments

CVLs accounted for 74% of all company insolvencies. The number of CVLs was 3% lower than in May 2026, and 15% lower than in June 2025.

The number of compulsory liquidations in June 2026 was 2% lower than in May 2026 and 15% lower than in June 2025. In the first half of 2026, the average monthly number of compulsory liquidations was 6% lower than the 2025 monthly average.

The number of administrations was 45% higher than in May 2026 and 80% higher than in June 2025. The average monthly number of administrations in the first half of 2026 was 41% higher than the 2025 monthly average. 

There were 14 CVAs in June 2026, this was 44% lower than in May 2026 and 7% lower than in June 2025. There were no receivership appointments in June 2026.

Commenting on the latest numbers, Sonia Jordan, President of R3 and Restructuring and Insolvency Partner at Knights, said “Corporate insolvency numbers in June remained similar to the previous month with 1,845 companies failing last month compared to 1,849 in May. Figures were also 10% lower than June 2025. However, there was a monthly spike in businesses entering administration of 45% due to 60 connected companies in the real estate sector entering administration. This is likely to be caused by the continuing ripple effects of the demise of mortgage provider Market Financial Solutions.

“Although we are seeing a welcome stabilising in insolvency numbers, these figures reflect conditions several months earlier, and since then the backdrop has become more difficult again. The short-lived relief some businesses may have felt from easing fuel and energy costs following developments in the Middle East has now been replaced by renewed uncertainty as the conflict resumes, with rising fuel costs likely to feed quickly into transport, supply chain and operating costs. This may edge up company insolvency figures again in the coming months.

“In positive news, the continued heatwave across the UK and major sporting events like the World Cup and Wimbledon have helped pubs and restaurants, while some online retailers have benefited as people avoided shopping in the heat. With costs for overseas travel remaining high, UK businesses in traditional holiday locations will also be looking to benefit from a boost as people seek to capitalise on the good weather with staycations.

“As Andy Burnham is due to take over as Prime Minister on Monday, businesses will also be looking for early clarity on the new Government’s economic priorities, particularly around taxation, confidence, support for growth and approach to re-nationalisation.”

Oliver Collinge, Partner at PKF Littlejohn Advisory, said “The fall in registered company insolvencies in England and Wales in June is a welcome sign, with numbers slightly down month-on-month and 10% lower than the same period last year. However, many businesses will still be operating in a challenging environment, with cost pressures, weaker demand and ongoing cashflow strain continuing to weigh on trading conditions.

“Retail and hospitality, and the construction sector continue to face significant pressure. Interestingly, the incoming Prime Minister’s team has indicated a willingness to consider extra assistance to help these industries, and businesses will be waiting to see if any of those ideas become policy in the coming weeks.”

James Fennessey, Restructuring and Insolvency Partner at international accountancy and business advisory group Azets, said“June’s corporate insolvency figures were dominated by Creditors’ Voluntary Liquidations (CVLs). While 50 fewer took place compared to last month and these are usually the most common insolvency process, CVL numbers remain higher than they were before the pandemic as directors lack the confidence and cash to keep their firms open in a trading climate that is dominated by rising costs, shrinking margins and political and economic uncertainty.

“Compulsory liquidation numbers remain higher than they were at the start of this year as both public and private sector creditors continue to focus on chasing down debts and turning to the court to secure the money they’re owed, with the patience and forbearance shown in the pandemic years now a thing of the past. Everyone is short of money, everyone is watching their payment deadlines and chasing unpaid invoices – and it’s likely this will continue in the second half of this year.

“Ongoing political, geopolitical and economic instability is hitting growth, recruitment and rescue, and making it hard for firms to stay solvent. The political and economic uncertainty in the UK, coupled with the ongoing effects of the conflict in the Middle East on costs and finance, and the ongoing challenging trading climate are making it hard for businesses to make money and stay in the black. 

“Times are tough for Britain’s businesses. It costs more to hire staff, profits are falling and cashflow levels are under pressure – and firms have been fighting financial fires in one form or another since 2020. Increases in rents, rates, materials, products, wages, and energy have all affected firms over the last six years – and with no let-up in sight it looks like they’ll be operating in a world where margins continue to shrink.

“Energy costs remain a key concern for many – especially in sectors where these can’t be passed on to the customer. While the summer months may see bills rise as businesses attempt to keep staff and customers cool, the real impact will be felt in the winter – a time when many are most concerned about outgoings, margins and profits and when additional expenses hit the hardest.

“From a sectoral perspective, costs are still hitting retailers and hospitality firms hard, and hiring is falling as a result. While sales appear to be rising, increases in volume don’t always translate to an increase in value and many businesses in this sector are having to work harder to stay still in the current climate. Where they can, they avoid passing their costs on to customers, but many simply aren’t able to do this anymore. 

“Construction is also suffering from delayed project starts, issues with planning permission and the ongoing triple blow of late payment, tight margins and soaring costs. The better weather in the summer months will hopefully increase output, but whether that is enough of a shot in the arm for the sector remains to be seen. “you a better chance of turning your situation around.”

Kathleen Garrett, Partner, Reed Smith, said “While insolvencies are lower than this time last year, it’s not clear if this a blip or a genuine reversal of the wider macroeconomic trend of rising distress. 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.

“It’s important to remember that these figures end the second quarter, which makes these figures particularly significant. Nevertheless, 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.

“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.

“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. The question is whether growth is part of the difference here. While the number of companies affected by insolvency is largely static month-on-month, the significant increase in number of registered companies since the financial crisis should mean some are growing.

“Another factor to watch is currency markets. Sterling has performed strongly, which can be beneficial to some companies but a source of pressure for others, particularly 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” 

Looking specifically at UK service sectors, accommodation and food service activities, wholesale and retail trade industries combined accounted for 6,696 number, 29% of total insolvencies in the year to June 2026. 

Giuseppe Parla, Restructuring & Insolvency Director at Menzies LLP, said “Amid the transition to a new Prime Minister and continued debate over proposed tax reforms, businesses are facing a period of heightened uncertainty. With key fiscal policies yet to be confirmed, many organisations are unable to plan ahead with confidence.

“While hospitality has benefited from increased consumer spending in pubs, driven by England’s World Cup campaign and longer opening hours, this relief is only temporary, and long-term issues facing the sector must be addressed by the incoming government.

“In particular, the hospitality and retail industries continue to pay high business rates – the effect of which is compounded by increased National Insurance contributions, labour, energy and food costs. The longer these industries wait for announcements on relief measures, the longer they continue to accrue increased costs without clear foresight on how their bottom lines will be affected. If confirmed by the incoming government, proposed cuts to business rates could offer much-needed relief following several challenging years, and could prevent businesses from being forced to further increase costs for customers or cut staff in response to high taxation.

“For individuals, proposed increases to the personal allowance for Income Tax could provide some financial relief, although changes are unlikely to take effect in the immediate future. Offsetting these positives are proposals affecting Council Tax and Stamp Duty, which have added further uncertainty to an already subdued property market, with fewer house sales and longer transaction periods reflecting continued caution among buyers and sellers.

“With the summer period set to bring significant political and economic changes, businesses should review their position and seek professional guidance to ensure they are ready to adapt as changes are announced. In a challenging economic environment, taking expert advice at the first sign of distress opens more options to protect value, preserve jobs and secure long-term financial stability.”