- Corporate insolvencies increased by 2.9% in April 2025 to a total of 2,053 compared to March 2025’s total of 1,996, and decreased by 5.1% compared to April 2024’s total of 2,163.
- Corporate insolvencies increased by 13.2% from April 2023’s total of 1,813.
- Personal insolvencies increased by 7.9% in April 2025 to a total of 10,012 compared to March 2025’s total of 9,282, and increased by 4.4% compared to April 2024’s total of 9,586.
- Personal insolvencies increased by 8.2% compared to April 2023’s total of 9,252.
Tom Russell, President of R3, the UK’s insolvency and restructuring trade body, and a Licensed Insolvency Practitioner and Director at James Cowper Kreston says:
“April’s corporate insolvency figures were the highest we have seen since July 2024. 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.
“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.
“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. The recent increase in unemployment indicates that the tax increases, along with the prospect of the Employment Rights Bill coming into law, has also affected hiring levels and investment as management teams wait to see how it will affect their wage bills, and we expect this to continue until the picture is clearer.
“Alongside this, businesses have faced the impact of the introduction of the US tariffs. While some of the outcomes from the President and Prime Minister’s recent announcement will be a relief to businesses in a range of sectors, a number of the details of the tariffs still need to be confirmed, and there is no denying their introduction will make it more expensive to export to America. The uncertainty and unpredictability around US tariff policy generally is also likely to affect costs, growth and investment as both business owners and lenders will look at how the tariffs will affect revenue and profits and may choose to change their plans, or review or withdraw their funding once these have been considered.
“Looking across the economy, the sectoral picture is a mixed one. Construction continues to be affected by ongoing issues with the price of materials, payment and client hesitancy about commissioning new work, while the care sector is trying navigate how it will manage the Government’s proposals to end overseas recruitment for social care visas. On a more positive note, retailers have benefited from the late Easter and improved weather, which has led to an increase in sales, and hospitality has also seen a rise in activity and spending levels. However, there is no escaping the fact that all of these sectors will be seriously affected by the changes to National Insurance and Minimum Wage, which will put a further squeeze on margins and increase costs, and could lead to more businesses becoming financially distressed.
“Turning to personal insolvencies, April’s figures were the highest we have seen for this particular month since April 2020 – although the balance between the processes has shifted significantly since then due to changes in the Debt Relief Order (DRO) debt threshold and administration fee and in regulations around how Individual Voluntary Arrangements (IVAs) are marketed. Compared to March 2024, personal insolvencies are up significantly, with more people entering IVAs and DROs in an attempt to help manage their debts.
“When these figures are combined with those applying for Breathing Space, they suggest that the debt problem in England and Wales which has been building over the last couple of months is starting to be reflected in the number of personal insolvencies. This month in particular, IVA and DRO numbers have increased and Breathing Space numbers have fallen, which could be seen as a sign that more people need practical help addressing their debts than last month.
“April also saw increases in a range of household bills, and this may have been the final straw for those who were already struggling to make ends meet after years of rising costs. For those who are not in this position, it will have led to them taking a closer look at their outgoings and making adjustments to help balance their household budgets.
“We have also seen a slowdown in wage growth, and while inflation is falling it remains above the 2% target, and it is very clear that people’s money does not buy what it did six or twelve months ago. The gap between increased costs and wage growth has meant people are increasingly worried about paying their bills and while they are spending, they are spending carefully, with small treats preferred over major purchases.
“Our message to anyone who is worried about money is a simple one: seek advice as soon as possible. We know how hard it is to talk about your concerns about your finances, but having that conversation while your worries are new gives you more options to address them and more time to take a decision about your next step. Most R3 members will give prospective clients a free consultation so they can learn more about their circumstances and outline some of the potential options for addressing them.”
