Company insolvencies remain high despite slight dip in March 2025

The number of registered company insolvencies in England and Wales dipped slightly in March 2025 but remains elevated compared to historical levels, according to official statistics released today by the Insolvency Service.

A total of 1,992 corporate insolvencies were recorded in March, representing a 2% fall from February’s figure of 2,032. However, the number was still 9% higher than in March 2024, when there were 1,826 insolvencies. Despite a slight decrease over the past 12 months compared to the record-breaking 2023 figures, insolvency levels remain historically high.

March’s company insolvencies comprised 295 compulsory liquidations, 1,543 creditors’ voluntary liquidations (CVLs), 137 administrations, and 17 company voluntary arrangements (CVAs). No receivership appointments were recorded.

While compulsory liquidations fell by 24% from the 10-year high seen in February, they remained higher than both the March 2024 total and the 2024 monthly average. CVL numbers stayed broadly in line with recent months, while administrations and CVAs increased compared to February 2025.

Despite the rise from pandemic-era lows, the insolvency rate still remains significantly below the peak levels seen during the 2008-09 financial crisis, largely due to the doubling of companies on the effective register over the past 15 years.

Personal insolvency figures also saw movement in March. There were 9,205 personal insolvencies, a 6.6% decrease from February 2025 (9,854) but a 2.4% increase compared to March 2024 (8,989).

Tim Cooper, President of R3, the UK’s insolvency and restructuring trade body, said the modest reduction in corporate insolvency numbers was driven by the fall in compulsory liquidations. However, he warned that overall levels remain troubling.

“The corporate insolvency statistics published today are higher than they were a year ago and show that demand for insolvency support and the number of firms entering insolvency processes are still high,” Cooper said.

He pointed to several factors continuing to pressure businesses, including recent US tariffs, increases in the National Minimum Wage, and higher Employer National Insurance contributions. These policy changes, Cooper explained, have exacerbated longstanding challenges such as increased operating costs, reduced consumer spending, and worsening late payment practices, particularly for small businesses.

“While it is too early to understand the extent of the impact the tariffs will have on businesses, we know they will affect purchase and sale prices, and will subsequently affect margins and profits, and potentially firms’ ability to service debt and source rescue funding,” Cooper added.

Sector-specific challenges are also evident. Construction output has been disrupted by mixed weather conditions and ongoing payment issues, while retail sales softened partly due to the late Easter holiday. In contrast, hospitality has benefited from warmer weather and a slight rebound in consumer confidence.

Cooper also highlighted ongoing discussions within the profession about how to make Restructuring Plans more accessible to SMEs, following encouraging signs of support from HMRC in recent high-profile cases.

Looking ahead, with National Insurance and Minimum Wage increases now in effect from April, analysts and insolvency professionals expect corporate insolvency numbers could climb in the coming months if firms struggle to absorb the added costs.