R3 warns businesses and households feeling financial strain in response to annual insolvency statistics
- Corporate insolvencies increased by 0.2% in 2025 compared to 2024 rising to 23,938 from 23,880
- Corporate insolvencies in December 2025 decreased by 10% to 1,671 from November 2025 when there were 1,850. December’s figure was 13% down on the same month in 2024.
Commenting on the Insolvency Service’s annual insolvency statistics for England and Wales, R3, the UK’s trade body for restructuring, turnaround and insolvency professionals, says the data shows businesses and households are facing continued financial strain.
Tom Russell, R3 president commented:“Corporate insolvencies in 2025 remain at historically high levels with nearly 24,000 businesses becoming insolvent. Difficult trading conditions, high overheads and the impact of the national insurance rise weighed heavily on businesses last year.
“Compulsory liquidation levels have increased to their highest annual number in thirteen years as creditors take firmer action to recover debts to manage pressures in their own businesses. While creditors’ voluntary liquidation numbers over the past four years are at their highest levels since records began in 1960.
“Although inflation has begun to ease and economic growth has picked up slightly, 2025 was a year in which many businesses were on fragile ground financially. The lasting effects of elevated costs, restricted access to finance and subdued customer demand continue to stretch cashflow, particularly for smaller and mid-sized firms.
“This ongoing strain is reflected in business confidence levels which, according to a survey from the Institute of Chartered Accountants in England and Wales, remain at a three-year low.
“Construction continued to be the most distressed sector last year with 3,950 companies entering insolvency which accounted for 17% of industries captured. Major housebuilders are also forecasting static growth and muted demand this year due to market uncertainty and rising building costs. Retail and hospitality also remained the second and third most distressed sectors.