Corporate insolvencies rise in April

The number of corporate insolvencies in England and Wales edged up by 2.9% in April 2025, reaching 2,053, according to official figures released today by The Insolvency Service. This represents a modest increase from March’s total of 1,996, but a 5.1% decrease from April 2024, when 2,163 companies entered insolvency.

Despite the month-on-month increase, the figures show that corporate insolvencies remain below the 30-year peak seen in 2023, though they continue to trend at historically elevated levels. Compared to April 2023, insolvencies are up 13.2% from 1,813, highlighting the long-term pressure facing UK businesses.

April’s insolvencies included 1,544 creditors’ voluntary liquidations (CVLs), 379 compulsory liquidations – the highest monthly number since September 2014 – 105 administrations, 24 company voluntary arrangements (CVAs), and one receivership. While CVL numbers were in line with recent months, compulsory liquidations surged, suggesting increased creditor action amid rising financial stress.

“Creditors’ Voluntary Liquidations remain the process companies most commonly enter into – and their consistently high numbers reflect the ongoing challenges, high costs and political and economic uncertainty businesses face – and the toll these are taking on their finances and their confidence in their ability to turn their situation around. Compulsory liquidations have also hit their highest level in more than five years as creditors chase down unpaid debts in an attempt to meet their own payment deadlines – led by the HMRC as the Government attempts to balance the national books.”

One in every 190 companies on the Companies House effective register – equivalent to 52.5 per 10,000 – entered insolvency in the year ending 30 April 2025. This marks a slight improvement from the 57.0 per 10,000 companies recorded the year before. While the rate has increased since pandemic-era lows, it remains significantly below the 2008–09 financial crisis peak of 113.1 per 10,000 companies, reflecting the overall growth in the number of active companies over the past decade.

Russell also pointed to policy and macroeconomic developments as key contributors to insolvency pressure: “Increasing costs and uncertainty are continuing to drive corporate insolvencies. April saw the introduction of the new rates for Employers’ National Insurance Contributions and Minimum Wage, which have increased overheads for businesses at an already challenging time. Many businesses will already have increased prices and cut expenditure to cope with the existing economic challenges and many, especially SMEs, will find it increasingly difficult to respond to further cost increases.”

Looking ahead, Russell warned that April’s figures may only be the beginning: “It is unlikely that we will see the full impact this will have on businesses until later in the year, but the prospect of these changes being introduced has influenced a number of directors’ decisions to seek insolvency and restructuring advice and consider the future of their businesses.”

He also noted that uncertainty over proposed employment law changes and newly introduced US tariffs is further complicating business planning, especially in export-reliant sectors.

Sectorally, the construction industry continues to grapple with material price volatility and payment delays, while the care sector is bracing for potential recruitment shortages due to new immigration restrictions. On the brighter side, the late Easter and better weather offered a short-term lift to retail and hospitality, though both remain vulnerable to cost pressures.

In addition to corporate figures, personal insolvencies rose sharply in April, increasing by 7.9% to 10,012 compared to 9,282 in March, and up 4.4% year-on-year from 9,586 in April 2024. Over a two-year period, personal insolvencies have risen by 8.2%.