Business insolvencies fell by 4% in September

Latest figures from the Insolvency Service have shown the number of business insolvencies in England and Wales fell by 4% in September 2026 when compared to the previous month, with 1,882 cases compared to 1,953 in August. September’s figure was 5% lower than the same month in 2025, when there were 1,973 cases.

The business insolvencies consisted of 341 compulsory liquidations, 1,420 creditors’ voluntary liquidations (CVLs), 102 administrations and 19 company voluntary arrangements (CVAs). There were no receivership appointments.

The number of CVLs was similar to August 2026 and lower than in September 2025, while compulsory liquidations were higher than in both months. Administrations were 44% lower than in August 2026, and 20% lower than in September 2025. A

CVLs accounted for 75% of all company insolvencies. The number of CVLs was 1% lower than in August 2026, and 9% lower than in September 2025.  The number of compulsory liquidations in September 2026 was 6% higher than in August 2026 and 25% higher than in September 2025.

The number of administrations was 44% lower than in August 2026 and 20% lower than in September 2025. There were 19 CVAs in September 2026, which was equal to the number in August 2026 and 12% higher than in September 2025. 

Sonia Jordan, a Restructuring and Insolvency Partner at Knights, said “September’s company insolvency figures continue the relatively stable pattern we have seen over recent months, but we have seen a further increase in personal insolvencies as cost of living pressures continue to bite.

“There were 1,882 company insolvencies in England and Wales in September, 4% lower than in August and 5% lower than in September 2025. While this suggests the overall picture remains relatively stable, businesses continue to face a range of financial pressures including high energy costs, increased employment costs, expensive borrowing and cautious consumer demand. Inevitably these pressures become too much for some companies, as reflected in today’s figures.

“Against this backdrop, businesses will be looking to the Chancellor and the October Budget for measures that give them greater certainty and confidence. In a recent poll of R3 members, reducing employment costs was the measure restructuring and insolvency professionals most frequently identified as supporting businesses and individuals, followed by reductions in business taxes and business rates reform.

“These concerns are reflected in the latest ONS labour market figures, published today, which show the lowest number of advertised job vacancies since 2021, with the sharpest decline among small businesses as those employers scale back recruitment, citing the increased costs incurred in employing people as a key factor. Small and medium-sized businesses are considered by many as being the backbone of the UK economy and the Chancellor should take note of this sector’s cries for relief from the almost prohibitive cost of recruitment.

“Pressure is also being felt more acutely in some sectors. Retailers continue to face cautious consumer spending, high operating costs and increased employment costs. The difficulties experienced by well-known high street names such as Poundland and TG Jones, which have looked to restructure and close stores after falling into financial difficulty, underline the challenges facing the sector.

“Directors should continue to keep a close eye on cash flow and seek advice as soon as they become concerned about their business’s finances. The earlier advice is taken, the more options there are available to turn the situation around.”

Giuseppe Parla, Restructuring & Insolvency Director at Menzies, said “A fall in insolvencies, modest GDP growth in August and an upgraded IMF forecast may be encouraging for the Government, but they mean little to those who have spent the past year absorbing one cost increase after another in the hope that conditions would turn. For them, this Budget represents a final chance to see that their patience will be rewarded before they consider a sale or exit.

“For owners who can no longer carry the burden of business costs alone, many will be considering a sale, with the recent run of high street deals and takeovers, including Boots, PizzaExpress and Morrisons, showing that appetite still exists. But any move to hike taxes on disposals could risk pricing them out of this route altogether, particularly smaller businesses, where the margin between a deal going through and falling apart is already thin.”

“The Chancellor must use this Budget to keep viable businesses trading, rather than reaching for another round of revenue raising that leaves them with nowhere to turn after years of financial distress. A larger tax bill on exit, coming on top of rising employment costs and the higher price of energy and borrowing, could close off that escape route entirely, pushing many past breaking point and costing the Treasury tax receipts it was depending on to fuel economic growth.

“Our message to those already managing tight margins would be to review their finances and take expert advice as soon as the first warning signs appear. Acting early gives them the best chance of adapting to new economic conditions and policies, and opens more options to protect value, preserve jobs and secure long-term financial viability.”

Owen Bassett, UK Risk Underwriting Manager at Atradius UK, said “Company insolvencies fell by 4% month-on-month in September, but the headline figure should be viewed against the continued financial pressure facing many UK businesses. Atradius’s latest claims data shows claims received from insured UK businesses rose nearly 13% month-on-month in September. There were also increases across a number of sectors, including construction, consumer durables and transport.

Louise Brittain, Joint Head of Restructuring and Insolvency at international accountancy and business advisory group Azets, said “September is typically when the true picture of the summer trading period emerges, and where business owners and management teams decide whether they can keep going or need to close the doors. With the holidays ending and court time capacity returning to its usual level, it’s also a month where HMRC and other creditors resume chasing debts.

“The month-on-month fall in insolvencies is due to a fall in administrations – and numbers for those have been high of late due to more than 250 connected companies in the Real Estate sector entering administration between March and August of this year.

“Compulsory Liquidations have increased for the fourth consecutive month to the second highest figure this year as creditors in both public and private sector continue to chase down debts, and Creditors’ Voluntary Liquidations remain high as directors continue to run out of fight and funds after years of tough trading conditions.”

“Despite the monthly fall in insolvencies, this September marked the end of a chapter rather than a change of season for many businesses as the economic alarm bells continue to sound. Costs are still rising, profits are still shrinking, and vacancies are at a 12-year low as many businesses simply can’t afford to hire.

“With Christmas on the horizon, a number of firms will be hoping for an end-of-year boost to their finances, but in the current climate it’s hard to see where that will come from – and it could be that the final three months of this year are the final three months of trading for some.

“Costs remain the biggest issue. Increases in wages and materials have squeezed margins tighter – to a point of distress for many. These rises in outgoings, coupled with fuel prices remaining high as a result of the ongoing conflicts in the Middle East and rising energy bills, have made it tougher and tougher to do business this year, and there appears to be no relief on the horizon.

“From a sectoral perspective, increased retail sales over the summer have been blunted by rising energy bills and higher wages, construction continues to suffer from a lack of new work, rising material costs and ongoing issues with payment times, and property remains affected by a stagnant market, falling prices, high debt levels and rising borrowing costs.

“With the weather turning colder, households are going to have to make their money go even further in the run-up to Christmas. This will cut disposable income further and be another blow to those industries that depend on discretionary spending.

“Businesses across the country will be praying that the Chancellor gives them a break at the Budget this month – even if that’s in the form of no new taxes rather than any reliefs. Right now, firms are feeling the pressures of six years of rising outgoings and economic and geopolitical volatility, and any further increases in expenses could tip more into insolvency. ”

Kathleen Garrett, Partner at international law firm Reed Smith said “Although the official line on the UK’s economic outlook has tended to be fairly gloomy, the decline in company insolvencies revealed by today’s statistics suggests that at least some of this pessimism is misplaced. The declining number of insolvencies for both September and Q2 as a whole is made more encouraging when measured against the increase in the number of companies registered since the pandemic.

 “There are a number of encouraging signs about the UK’s economic performance that have now been reinforced by this latest release from the Insolvency Service. First and foremost, the UK economy grew last month with the IMF revising its predictions upwards, and the tax collected by HMRC has also increased. Although this is partly attributable to the tax rate having gone up, it is a positive economic indicator.

“Productivity, which has been highlighted as a particular failing for the UK, may well also have been higher for some years than the official statistics have accounted for. Two think tanks have recently argued convincingly it has been mis-measured, and the ONS would appear to agree with that assessment, at least in part, having changed its methodology for measuring productivity. Widespread use of AI may also have contributed to an increase in productivity, particularly for smaller and more nimble companies that may be particularly well-placed to harness this technology.

“Some more short-term trends may also have contributed to the decrease in insolvencies. This includes retail spending over the summer, some of which may have been spurred by England’s run to the World Cup semi-final and unusually hot weather, with consumer confidence having reached a two-year high in August.

“The good news of increased confidence and fewer insolvencies does need to be tempered by some more concerning trends. The flows of global trade remain vulnerable to disruption and material prices, particularly fuel for energy, are being driven up which may ultimately have a knock-on effect, with the IMF predicting that inflation will cross the 3% threshold in the coming months. Credit card defaults have also been rising and reached their highest level since 2008 which raises questions about how sustainable both consumer spending and consumer confidence will be in the long-term.”