Company insolvencies increase as businesses face difficult trading environment
New data published by the Insolvency Service shows number of registered company insolvencies in England and Wales was 2,238 in May 2025, 8% higher than in April 2025 (2,074) and 15% higher than the same month in the previous year (1,946 in May 2024).
Mark Ford, partner in the Restructuring & Recovery team at professional services firm S&W comments:
“Many businesses are continuing to face a challenging operating environment and this is reflected in the latest data published by The Insolvency Service. The impact of sluggish economic growth, high borrowing costs, low consumer confidence and high inflation in recent years has eroded cash reserves for businesses and left some in a perilous position.
“Businesses are now facing newer challenges that threaten their viability and this means we are likely to continue to see a steady stream of company insolvencies in the coming months. Higher costs resulting from increases to employer national insurance contributions, the minimum wage and business rates are all heaping considerable pressure on businesses, particularly those that feel they are unable to increase prices for fear of losing customers.
“Research S&W published as part of The BOSS (Business Owners Sentiment Survey) report highlights the challenges many businesses are facing. From polling 500 UK business owners, our research found that more than third of business are planning to make further cuts to staff numbers in response to increased employer national insurance contributions. Business owners also reported that they had been hit by a range of other external events, particularly rising costs.
“The UK economy shrank more than expected in April and consumer confidence remains low. Worryingly, the threat of recession – which could push increasing numbers of people into unemployment – has not gone away.
“Given the challenging economic backdrop, businesses need to urgently wake up to the risks that could affect their operations and plan accordingly. Those that take a realistic look at the pressures facing their businesses and focus on building cash reserves will maximise their chances of survival and saving jobs.”