- Corporate insolvencies increased by 1.4% in July 2025 to a total of 2,081 compared to June 2025’s total of 2,053, and slightly increased by 0.1% compared to July 2024’s figure of 2,078.
- Corporate insolvencies increased by 15.2% from July 2023’s total of 1,807.
- Personal insolvencies increased by 1.8% in July 2025 to a total of 10,515 compared to June 2025’s total of 10,328, and slightly increased by 0.3% compared to July 2024’s figure of 10,479.
- Personal insolvencies increased by 24.3% from July 2023’s total of 8,456.
Tom Russell, President of R3, the UK’s restructuring, turnaround and insolvency trade body, and a Licensed Insolvency Practitioner and Director at James Cowper Kreston, says:
“Corporate insolvencies remained broadly stable last month, with the trends showing a rise in Compulsory Liquidations and a slight uptick in Administrations, while Creditors’ Voluntary Liquidations and Company Voluntary Arrangements fell. This pattern may suggest that fewer directors are choosing to close their companies voluntarily, whether because they are seeing improvements in trading conditions or are caught in a holding pattern, waiting to see where the economy may head next.
“Compulsory Liquidations were higher this July than compared to one and two years ago. Our members are reporting that HMRC is taking a more assertive stance towards enforcement, with greater appetite to recover unpaid taxes through the courts. Directors are feeling the impact of this firmer enforcement, which is adding pressure on businesses already navigating a challenging market.
“While corporate insolvency figures have remained relatively stable, the broader economic picture shows tentative signs of recovery. Following a weak April and May, when some spending may have been brought forward in anticipation of higher prices, economic activity picked up in June, helping Q2 GDP to grow by 0.3%. While this represents only modest growth, it is encouraging to see the economy moving forward rather than stalling. Coupled with the recent cut to interest rates, the outlook for businesses appears slightly more positive, though it is too soon to gauge the full effect, and above target inflation remains a concern.
“However, a sense of caution remains widespread across the UK. Many firms are sitting at a crossroads, delaying major decisions until they see which way the economy moves. Our members report a consistent picture: directors are taking stock of their position and seeking professional advice, often as part of contingency planning should expected investment does not materialise, or to ensure boards are clear on their options and responsibilities should insolvency become a risk. They are assessing whether trading conditions are likely to improve and, in many cases, whether the cost-saving measures they may have already taken will be enough to keep their struggling business afloat.
“Challenges remain for both retail and hospitality, where higher costs, changing consumer habits, and uneven demand continue to make trading conditions difficult. Within retail, the difficulties appear concentrated among individual retailers rather than the sector as a whole, with some larger high-street brands being outpriced and outperformed by cheaper online, alternatives as shoppers seek the best value.
“Construction remains one of the sectors most affected by insolvencies. While it is encouraging to see output rising, many businesses are still facing challenges. Supply chain pressures, skills shortages, and changes in the housing market mean the environment for construction firms continues to be complex and unpredictable, even as overall activity shows some improvement.
“Turning to personal insolvencies, the slight yearly rise has been driven by an increase in Individual Voluntary Arrangements (IVAs), while Bankruptcies and Debt Relief Orders (DROs) have fallen over the same period. DROs remain consistently higher than before April 2024, following changes that removed the fee and made the process more accessible, suggesting that the large surge seen last year may now be beginning to ease slightly.
“Breathing Space registrations also increased by 14% compared to this time last year, reaching their highest level in more than three years. This points to a growing number of people seeking temporary respite from creditor action, allowing them time to assess their options and plan their next steps.
“For households, the main pressure continues to come from higher day-to-day expenses. Pay increases are often absorbed by everyday essentials, leaving little room for people to build savings or manage unexpected expenses. That lack of headroom is leaving people vulnerable to even small changes in their circumstances.
“While we have not seen large-scale job losses, unemployment remains a concern, having stabilised at a higher level than this time last year. People rarely enter a personal insolvency process immediately after losing work and many find work again relatively quickly, but for others a longer period of unemployment or having to take work at a reduced salary can lead to mounting debts over time, and so it may be several months before these pressures show up in the statistics, with the full impact likely to emerge into 2026.
“Our message to businesses and individuals remains the same: seek advice at the first signs of financial distress. Taking action early gives you more options and more time to make a considered decision about how to move forward in the best way for your circumstances.”
