Business insolvencies increase

Latest figures from the Insolvency Service have shown that the number of business insolvencies in England and Wales,  was 2,029 in October 2025, 2% higher than in September 2025 (1,995) and 17% higher than the same month in the previous year (1,739 in October 2024).

The business insolvencies consisted of 301 compulsory liquidations, 1,592 creditors’ voluntary liquidations (CVLs), 119 administrations and 17 company voluntary arrangements (CVAs). There were no receivership appointments.

The number of compulsory liquidations in October 2025 was 8% higher than in September 2025, 62% higher than in October 2024 and 12% higher than the 2024 monthly average. On 1 November 2025, the Insolvency Service moved to a new case management system, with ISCIS being phased out in the last week of October 2025. Therefore, it is possible that some compulsory liquidation cases from October 2025 are not included in this month’s publication, and numbers for October 2025 may be revised in next month’s publication.

The number of administrations in October 2025 was 3% lower than in September 2025 but 19% higher than in October 2024. The average monthly number of administrations so far in 2025 is lower than the 2024 monthly average.

The number of CVAs in October 2025 was the same as in September 2025 and 42% higher than in October 2024. Numbers remain low compared to historical levels. CVAs are not seasonally adjusted due to low volumes.

Tom Russell, President of R3, the UK’s restructuring, turnaround and insolvency trade body, said “Corporate insolvencies have increased by 2% in October 2025 compared to September and are also up by 17% on the same month last year. However, they are down by 11% compared to October 2023, which saw 30-year high annual numbers of insolvencies. The 8% increase in compulsory liquidations compared to September 2025 indicates that creditors, including HMRC, are being more aggressive in enforcing debts.

“Today’s increase in insolvencies continues a concerning trend. The figures are being published against a background of economic uncertainty with businesses and consumers alike delaying major financial decisions until they can assess the outcome of next week’s Budget. This hesitancy is creating a sense of stagnation, with business owners looking to the Chancellor for measures that boost growth and spending.

“The pressure on businesses remains considerable as shown by a number of high-profile insolvencies announced over the past few weeks including Pizza Hut, Tomato Energy, Sheffield Wednesday FC and Petrofac. For every failing business that hits the headlines, there are hundreds of small and medium size businesses struggling for their survival.

“Last week’s increase in unemployment to 5% indicates businesses are having to make difficult decisions about hiring and potentially, redundancy. With GDP growth also stagnant at 0.1% last quarter, business owners are contending with a difficult trading environment with higher employment, energy and materials costs. At the same time, creditors are becoming more proactive in forcing debts, borrowing costs remain elevated and consumer spending is subdued. These challenges underpin today’s insolvency rates and underline the need for positive, growth-focused measures in the Budget.

“Sector-specific pressures are also evident. Retailers are contending with weaker sales as consumers hold off for Black Friday discounts and save for the festive period. The British Retail Consortium has reported lower high street footfall amid fragile consumer confidence. For many retailers, the upcoming festive trading season will be pivotal, and they’ll be hoping for measures such as business rates reform and investor incentives to help stabilise their outlook.”

Matthew Richards, Joint Head of Restructuring and Insolvency at international accountancy and business advisory group Azets, said “The biggest driver of the increase in corporate insolvencies has been liquidations, which shows there are more businesses who have either gone beyond the point of rescue or whose management teams simply don’t have the fight or the funds left in them to try and turn things around. Many directors have been trying to hang on since the end of the pandemic, and it would appear that an increasing number have run out of road in a trading climate that has been tough for as long as anyone can remember and which shows no sign of improving in the short-term.”

“To put it simply, five years of economic and geopolitical uncertainty is continuing to drive insolvencies. Businesses face a continuing storm of rising costs, constrained spending and increased creditor pressure – as well as the looming Budget.

“As firms across the UK take every possible step to manage their own outgoings, creditors of every shape and size are now taking every possible step to chase down debt, with HMRC leading the way in its quest to recover money for the Treasury. This has added another layer of pressure on businesses at a time when profits have shrunk and expenses have soared, and has resulted in more firms seeking advice and support.

“Construction, retail and hospitality are the industries that have been hardest hit as increased costs, eroded margins, and cautious consumer and client spending have hit them particularly hard. Both sectors have seen prices of materials and stock soar, and the increases in National Minimum Wage and Employer NI will have resulted in salary reviews right across the sector and across the UK, rather than just for those on the lowest wages.

“We’ve seen more insolvencies this year than with had by this time last October, and it’s highly likely numbers will increase in the run up to Christmas. With economic growth sluggish, unemployment increasing and many firms struggling to break even – let alone grow – the prospect of a future recession is a real and serious one, and one which will cause further problems for businesses across the country.”

“The eyes of the UK business community will be on the Chancellor at the Budget at the end of this month as directors hope she doesn’t introduce anything that adds to their already heavy cost burdens and that may lead to more firms facing insolvency. Firms in the service sectors are visibly worried about the potential impact tax increases will have on discretionary spending, footfall and revenue – and will be hoping any ripple effect from this doesn’t deal them another blow at a time when many are struggling to keep their heads above water.”

Giuseppe Parla, Restructuring & Insolvency Director at Menzies,said “Insolvency statistics have risen again as businesses continue to hold their breath ahead of a delayed Autumn Budget. The reality is that British businesses remain under pressure, impacted by rumours of tax hikes, price rises and their ability to break even in an unpredictable economic climate.

“As we sit a week from the Budget, all eyes are on the Chancellor to set out how this Government plans to restore confidence and financial stability. Businesses are looking for clarity on growth, tax pressures, cyber risks and shifting international trading rules.

“The Red Box will signal the direction of travel, but with VAT, Income Tax and NIC all under scrutiny, bumps in the road are inevitable. Unemployment is at its highest point in four years, wage growth is slowing, and many expected cuts to the Bank base rate that didn’t come. Yes, the UK avoided recession, but with only marginal GDP growth, the pressure is firmly on for a Budget that supports the economy without placing further strain on working people.”

Seeking help is a difficult conversation to have. But, as ever, our message to businesses is clear: please act early if you anticipate financial trouble. Doing so ensures that more options are available for you to address business issues, to secure a profitable future and remain trading.”

Nick O’Reilly, former R3 President and Restructuring Director at MHA, the accountancy and advisory firm said “The number of company insolvencies in the England and Wales has risen to 2,029 in October, only 2% higher than September’s figure, as the trend of relative stability in solvency levels persists.

“The business climate continues to be marked by uncertainty, with firms closely watching the upcoming Autumn Budget and awaiting crucial decisions from the Chancellor. In the past month, we have seen the insolvency of two regional airlines — Eastern Airways and Blue Islands. While this may merely be a sign of the decline of regional airlines as their passenger numbers fall, it also serves as a reminder that smaller operations are less resilient in the face of an uncertain economic environment.

“The Government’s alleged cancellation of planned rises to the base rate of income tax, despite more optimistic economic forecasts, has done little to settle nerves. There remains concern that efforts to address the fiscal deficit could see additional costs shifted to employers, once again hitting businesses following last year’s increases to employer National Insurance Contributions.

“While the impact of measures announced in the Budget will likely not be evident in solvency levels until January at the earliest, businesses that can navigate the challenging economic landscape over the next year will be best placed for long-term success. As organisations allocate resources towards productivity-boosting technology, those businesses who weather the current storm should be able to capitalise when these advancements translate into measurable improvements in business efficiency.”

Simon Edel, Financial Restructuring Partner at EY-Parthenon, said “The small uptick in overall company insolvencies in October, alongside a more significant 19% year-on-year rise in administration activity, are the latest signals of the enduring effects of ongoing economic, policy, geopolitical and earnings pressures that businesses are having to content with.

“Many firms are still struggling to offset higher employment costs – either through pricing or productivity gains – whilst also contending with structural changes to their markets and external threats, including cyberattacks.

“Companies are now bracing themselves for what could be another difficult Autumn Budget, and further challenges will lie ahead. In this turbulent economic environment, they should remain focused on strengthening liquidity to ease debt pressures.

“Since the 2008 global financial crisis, insolvency has played less of a role in complex restructurings. However,  with persistent economic uncertainty, rising distress, and challenges like liquidity constraints and value erosion, we expect it to become more common as companies and stakeholders seek ways to protect value.

“Being able to demonstrate a reliable and measured scenario-based forecasting approach, alongside a robust trading performance, will be crucial to building stakeholder confidence and avoiding difficulties when it comes to refinancing.”