Rise in insolvencies indicates impact of ongoing economic uncertainty, R3 says
Commenting on the Insolvency Service’s latest monthly statistics for England and Wales, R3, the UK’s trade body for restructuring, turnaround and insolvency professionals, says that a combination of geopolitical instability, domestic uncertainty and rising costs are pushing up corporate insolvencies with numbers at their highest level since June 2024.
Sonia Jordan, president of R3 and partner at Knights, said: “Corporate insolvencies increased by 2% in April, compared to the previous month, rising to 2,085 cases and by 3% compared to the April 2025. This means corporate insolvencies are at their highest number since June 2024. These consisted of 371 compulsory liquidations, 1,510 creditors’ voluntary liquidations (CVLs), 183 administrations and 20 company voluntary arrangements (CVAs).
“Insolvency numbers always reflect a range of underlying factors and while we have seen welcome economic growth in the first quarter of the year, the current environment remains challenging for businesses and households alike. Ongoing geopolitical conflict, coupled with economic and political uncertainty closer to home, is creating an unpredictable backdrop at a time when stability is badly needed.
“April saw an increase in costs for many employers following recent policy changes, including higher labour costs linked to the increase in the National Minimum Wage and rises in business rates for some firms, with hospitality, retail and leisure particularly affected.
“These have added to overheads, coming on top of higher fuel and energy costs and at a point when the labour market is already showing signs of strain, with unemployment rising to 5% while job openings have fallen by 3.9%.
“Recent high-profile cases, such as TG Jones, which plans to close stores and cut jobs, have highlighted the impact of rising and outstanding business rates liabilities on businesses’ financial positions.
“Meanwhile, company cashflows are also being affected by increasing numbers of late payments, as our latest Business Health Report revealed, with more than 1.5 million businesses affected. For a minority of firms, delaying payment has become embedded as a business practice, but this creates a domino effect across supply chains, placing particular strain on smaller businesses and pushing some towards insolvency. It is a positive development that the King’s Speech included government plans to tackle this issue.”
Turning to personal insolvencies, Sonia commented: “We have seen a welcome monthly decline in personal insolvencies which were down 10% in April, although numbers remain elevated by 7% on April 2025, reflecting the impact on households of higher fuel, energy and food costs. The number of debt relief orders (DROs) in April 2026 reached 4,033 and there were also 701 bankruptcies and 6,186 individual voluntary arrangements (IVAs).
“Recent research indicates that disposable incomes have fallen since the escalation of the Middle East conflict, with families in particular seeing a sharper reduction in the money they have left after essential spending. This is feeding through to reduced consumer spending and to increasing reliance on credit. When this becomes unsustainable, individuals can get into financial difficulty as reflected in levels of personal insolvency.
“In this environment, we are likely to see continued demand for professional advice from specialist R3 members. Seeking support at an early stage remains key to preserving options and achieving the best possible outcome, whether for businesses or individuals.”
What the latest insolvency stats show
Corporate insolvencies increased by 2% in April 2026 compared to the previous month rising to 2,085 from 2,037. April’s figure was 3% up on the same month in 2025.
Personal insolvencies decreased by 10% in April 2026 compared to the previous month, from 12,089 to 10,920. Personal insolvencies were 7% higher in April 2026 compared to the same month in 2025 when the figure was 10,206.