Company insolvencies rise 8% in May

The number of registered company insolvencies in England and Wales rose sharply in May 2025, with 2,238 firms collapsing – an 8% increase compared to April and 15% higher than the same period last year, according to official figures from The Insolvency Service.

This marked the highest May total in the last three years and continues a trend of elevated insolvency activity throughout the first half of 2025. While company failures have slightly exceeded 2024 levels so far this year, they remain on par with 2023 – a year that recorded the highest annual insolvency total in three decades.

The latest data reveals that May’s insolvencies comprised: 1,734 Creditors’ Voluntary Liquidations (CVLs), 354 Compulsory Liquidations, 136 Administrations, and 14 Company Voluntary Arrangements (CVAs)

CVLs – where company directors voluntarily place their firms into liquidation – accounted for nearly 80% of all cases and increased compared to both April and the monthly average for 2024. Meanwhile, compulsory liquidations fell 7% from April’s 10-year peak but remained elevated year-on-year. Administrations also rose month-on-month, while CVAs dipped slightly.

“The climate remains very tough for businesses and we are seeing this reflected in the number of directors who are actively taking steps to wind-up their companies, and the number of creditors who are turning to the courts to pursue the debts they are owed – led by HMRC who are attempting to recover money for the public purse.”

Russell highlighted several contributing factors, including recent hikes to National Insurance and the National Minimum Wage, ongoing US tariff uncertainty, and sustained inflation driving up wages, energy, and materials costs.

Although the construction sector saw a boost in output, tight margins and late payments persist. Retail and hospitality have been hit particularly hard by weak consumer spending, with many businesses reducing hours or freezing hiring.

Russell warned: “Challenges like these do not go away overnight, and May was another tough month for businesses in England and Wales as a result of these issues and the ongoing costs of materials, staff and energy, as inflation remains above the Bank of England target, all of which affected businesses and business planning.”

Despite the rise in corporate collapses, the 12-month rolling insolvency rate – which smooths out monthly volatility – showed a slight decline. Between June 2024 and May 2025, 53.0 companies per 10,000 on the Companies House register entered insolvency, down from 55.6 per 10,000 the previous year.

While insolvency rates have risen since pandemic-era lows, they remain well below the 2008–09 recession peak of 113.1 per 10,000 companies, partly due to the significant growth in the number of registered businesses.