Corporate insolvencies in the UK increased by 2.9% in February 2025 to a total of 2,035, up from 1,978 in January, according to the latest figures from the Insolvency Service. However, this represents a 7% decrease from February 2024, when 2,188 businesses entered insolvency. Compared to February 2023’s total of 1,964, insolvencies have risen by 3.6%.
After seasonal adjustment, the number of registered company insolvencies in England and Wales was 2,035, marking a 3% increase from January but remaining 7% lower than the previous year. Despite the drop from 2024 levels, insolvencies continue to be high relative to historical standards, reflecting ongoing financial strain on businesses across multiple sectors.
In February 2025, the insolvencies comprised 393 compulsory liquidations; 1,520 creditors’ voluntary liquidations (CVLs); 115 administrations; 7 company voluntary arrangements (CVAs); and 0 receivership appointments. Compulsory liquidations saw an increase from January 2025, reaching the highest monthly figure since September 2014, while CVLs, administrations, and CVAs experienced slight declines.
Tom Russell, Vice President of R3, the UK’s insolvency and restructuring trade body, noted that the rise in compulsory liquidations is a key driver of the overall increase in corporate insolvencies.
He attributed this to a tightening stance from creditors, particularly HM Revenue and Customs and local authorities, who are ramping up enforcement action against companies with outstanding debts.
“A number of economic and political issues are continuing to drive insolvencies and affect businesses across the supply chain,” Russell said. “High costs and cautious consumer and client spending mean creditors are being more aggressive about pursuing the money they are owed and aren’t afraid to turn to the courts to recover outstanding debts.”
He added that many business directors facing insolvency see closure as the only viable option after years of financial struggles, with little hope for short-term improvement. Looking ahead, he warned that the upcoming National Insurance and National Minimum Wage increases in April could further strain businesses, particularly smaller firms that struggle to pass increased costs onto customers.
Retail and hospitality businesses remain under pressure as consumer spending continues to be squeezed. Construction firms have been hit by a drop in new projects and adverse weather conditions, while the manufacturing sector continues to battle cost and trade-related difficulties, affecting demand and output levels.
“These sectors have had to contend with continuing increases in costs alongside these challenges, and are likely to be among those most affected by the NI changes that are being introduced in April,” Russell explained.
