R3 responds to September 2025 insolvency statistics
Commenting on the publication of the September 2025 monthly insolvency statistics for England and Wales, Tom Russell, president of R3, the UK’s restructuring, turnaround and insolvency trade body, said: “Corporate insolvencies have decreased slightly in September 2025 compared to August and have increased by 2% on the same month last year. However, overall, insolvency activity remains high, with a sense of ‘stable stress’ continuing across businesses and households alike.
“With the November budget around the corner, many business leaders are nervous about what lies ahead and are putting off making major recruitment or investment decisions. They will be hoping that the chancellor introduces confidence building measures that encourage investment, recruitment and expansion rather than further increasing the tax burden which could worsen cashflow problems for businesses which might already be struggling.
“Ongoing challenges such as higher energy and materials costs, cautious consumer demand and creditor pressure have combined with slower than anticipated reductions in the cost of borrowing to leave some businesses fighting hard to stay afloat.
“This pressure is reflected in the latest Office for National Statistics business insights data, which revealed that around one in six (17%) trading businesses reported having no cash reserves in late September 2025 – the highest proportion since the question was introduced in June 2020.
“This is deeply concerning, as a lack of cash reserves leaves businesses particularly vulnerable to even small financial shocks, such as a bad debt or loss of a customer, challenges which they might previously have been able to weather. It suggests insolvency activity is likely to remain at the current level for some time.
“Sector-specific pressures are also evident. The hospitality sector continues to face difficulties, with the hotel sector being a case in point. Whilst specialist spa or wedding venues remain busy, for independent and regional hotels the higher staff, maintenance and food costs are impacting margins.
“While many hospitality businesses have managed through the summer months and are looking ahead to the festive season, they will need to plan carefully for the traditionally quieter months of January and February. Supportive measures in the November budget, such as positive transformation of business rates, would be particularly welcome.
“The latest wage growth and unemployment figures suggest the labour market has stabilised. However, young people, who are often employed in hospitality firms, have been disproportionately affected with higher rates of unemployment” Tom added.
Commenting on the personal insolvency figures, Tom, who is also a licensed insolvency practitioner and director at James Cowper Kreston, explained: “While personal insolvency rates have also slightly decreased in September, the figures are significantly up on September 2023 reflecting the continued pressure of high living costs. Debt relief order numbers in September 2025 were lower than the record high seen in August 2025 but remain at historically high levels. There has also been an increase in the average number of Individual Voluntary Arrangements compared to the first half of 2025.
“This reflects more households being unable to meet basic expenses and having few other options for addressing their debts. With wage growth slowing, food prices remaining high and bills increasing, these challenges are unlikely to ease over the autumn months.
“As Black Friday approaches, there is also a risk that some consumers will turn to ‘buy now pay later’ credit options to manage spending, potentially adding to already unsustainable debt levels.
“Our message to businesses and individuals remains the same: seek advice from a regulated professional at the first signs of financial distress. Taking action early gives you more time, more options and a greater chance of achieving a positive outcome.”