Tom Russell, R3 President commented:
“Corporate insolvencies increased by 7% in February, compared to the previous month, rising to 1,878 cases, although they were 7% lower than the same month in 2025. These consisted of 249 compulsory liquidations, 1,473 creditors’ voluntary liquidations (CVLs), 146 administrations and 10 company voluntary arrangements (CVAs). Meanwhile, personal insolvency rates are increasing with debt relief orders hitting a 17-year high.
“While today’s figures pre-date the current Middle East conflict, the rise in energy and fuel prices we are now seeing will inevitably mean a very shaky start to the quarter for many companies. Despite economic activity stalling in January, there had been some signs of stability returning to the economy, but the situation in the Middle East has delivered a fresh shock to businesses and households.
“The fallout from this geopolitical uncertainty risks hitting consumer spending, business confidence and investment decisions, and reduces the likelihood of interest rates coming down when the Bank of England makes their decision later this week.
“Sectors with high energy usage or thin margins, including hospitality such as hotels and restaurants, may be particularly exposed, and could feature more prominently in the insolvency figures as the year progresses.
“We’re already seeing business owners becoming more cautious about investment decisions, choosing to wait and see rather than commit while costs and demand remain uncertain. That hesitation, combined with rising overheads, means some businesses that were just about coping may now find themselves under renewed strain. This is likely to have a knock-on effect to insolvency rates in the coming months as higher costs make their way through to supply chains and balance sheets.”
Turning to personal insolvencies, Tom Russell, who is also a licensed insolvency practitioner and director at James Cowper Kreston, added:
“We are seeing a sustained rise in personal insolvencies which were 18% higher in February than the same month last year as cost of living pressures continue to bite. The number of debt relief orders (DROs) in February 2026 reached 4,210 – their highest rate since they were introduced in 2009, exceeding the previous high of 4,185 in August 2025. There were also 768 bankruptcies and 6,631 individual voluntary arrangements (IVAs).
“The increase in the number of debt relief orders (DROs) shows that many households are really struggling to make ends meet. The prospect of inflation increasing at a faster rate than expected because of the Middle East conflict comes on top the already high cost of everyday living. Any sustained rise in inflation will make it harder for people to balance their finances, especially those with little financial resilience.
“Many households will be hoping that this is a short-lived spike in prices, but if higher costs persist, we could see growing numbers of people seeking debt advice and support.”
R3 continues to urge anyone worried about their financial situation, whether business owners or individuals, to seek professional advice as early as possible. Getting early advice significantly increases the options available to businesses and individuals in financial distress.
What the latest insolvency stats show
Corporate insolvencies increased by 7% in February 2026 compared to the previous month rising to 1,878 from 1,749. February’s figure was 7% down on the same month in 2025.
Personal insolvencies increased by 6% in February 2026 compared to the previous month, rising to 11,609 from 10,949. Personal insolvencies were 18% higher in February 2026 compared to February 2025 when the figure was 9,861.
