Businesses administrations expected to increase again in 2025

21st January 2025

New analysis by Kroll found there were 1,330 business administrations last year, a 6% increase on the year before and significantly higher than in the years following the pandemic.

Manufacturing suffered the most with administrations up by a fifth followed by the construction sector. The sector posting the biggest increase in business administration was recruitment (53%) followed by media and technology, with a jump of 50%.

Kroll predicts that the total number of company administrations will grow again this year as Labour’s tax hikes bite. Employers pay National Insurance (NI) contributions on workers’ wages will increase by 1.2 percentage points to 15pc from April, while the threshold at which employers pay the tax will be lowered from £9,100 to £5,000.

Kroll is forecasting that the NI increase will hardest hit the leisure, hospitality, retail and healthcare industries because of the large number of people they employ. Large corporates may be able to absorb the added costs.

Benjamin Wiles, Head of UK restructuring at Kroll said “Leisure and hospitality have seen a bit of growth in [administration] numbers over the course of last year, but I would expect them to be most heavily impacted, together with healthcare.

“We’ve seen how bad the impact on healthcare is. It will come down to whether local authorities or the NHS change their structure in terms of fee-paying to the private sector, effectively.

“Unless there’s an increase in fees at care homes from local authorities, we’re likely to see a considerable number of failures and therefore lack of capacity within the sector as well.

“There’s been a number of businesses looking forward over the course of 2025, and thinking [that they] need to plan for any potential downside.”