Company Insolvency Statistics May 2025
The latest Company Insolvency Statistics May 2025 have been released by the Insolvency Service, revealing yet another increase in formal insolvencies across England and Wales.
For directors already navigating difficult financial terrain, this month’s figures underline a wider trend: more companies are reaching a critical tipping point.
In this article, we’ll break down what the May 2025 insolvency figures really mean. We’ll look at the key trends behind them, and what company directors should take away from the data. particularly those who are feeling the pressure of mounting debts.
Insolvency Numbers Continue to Climb in 2025
In May 2025, there were 2,238 registered company insolvencies in England and Wales, an 8% increase from April 2025, and 15% higher than in May 2024.
This monthly total includes:
- 1,734 Creditors’ Voluntary Liquidations (CVLs)
- 354 Compulsory Liquidations
- 136 Administrations
- 14 Company Voluntary Arrangements (CVAs)
CVLs accounted for 77% of all company insolvencies, indicating that more directors are choosing to close their businesses voluntarily rather than wait for creditors to take legal action.
Why does this matter?
Company insolvencies are a clear signal of distress in the economy.
The fact that figures are now 15% higher than this time last year shows that more businesses are struggling to trade through inflationary pressure, rising interest rates, and reduced consumer confidence.
If you’re facing similar challenges, it’s important to act early, especially while more options are still on the table.
What’s Driving the Rise?
Several factors are contributing to the uptick in insolvency cases in 2025:
1. Persistent Economic Pressure
Even as inflation has stabilised slightly, many businesses are still contending with higher operational costs, increased borrowing costs, and weakened cash flow.
These issues are especially acute in sectors like construction, retail, hospitality, and manufacturing.
2. End of Pandemic Support
The temporary support measures that kept many businesses afloat during 2020-2021 are long gone.
Now, legacy debts (such as Bounce Back Loans or tax arrears) are catching up with many directors, and time-to-pay arrangements are expiring.
3. Return of Creditor Enforcement
Compulsory liquidations where a company is wound up by court order were 32% higher in May 2025 than in the same month last year.
While down slightly from April’s 10-year high, this suggests a growing appetite from HMRC and other creditors to pursue unpaid debts more aggressively.
Long-Term Trends: Are We Nearing a Peak?
Although monthly insolvencies have risen in 2025, the 12-month rolling insolvency rate has slightly decreased.
Between 1 June 2024 and 31 May 2025, one in every 189 companies on the Companies House register entered insolvency, equivalent to 53.0 per 10,000 companies.
This is down from 55.6 per 10,000 in the year ending May 2024.
So, what does this mean?
While short-term figures are climbing, the overall insolvency rate is still well below the peak seen during the 2008-09 recession (113.1 per 10,000).
However, the volume of companies on the register has more than doubled since then, meaning the raw numbers of insolvencies are still significant.
CVLs Continue to Dominate
Creditors’ Voluntary Liquidations are now firmly the most common type of insolvency.
In May 2025:
- CVLs were 11% higher than April 2025
- And 13% higher than in May 2024
This trend reflects a growing number of directors who are proactively choosing to close their company through a CVL when recovery is no longer feasible.
A CVL can be a sensible, controlled exit from a struggling business. One that can help protect directors from future creditor action and deal with company debts in a structured, legally compliant way.
Industry Spotlight: Which Sectors Are Most Affected?
Looking at the 12 months to April 2025, the sectors with the highest number of company insolvencies were:
- Construction – 4,032 cases (17%)
- Wholesale and Retail Trade – 3,615 cases (15%)
- Accommodation and Food Services – 3,369 cases (14%)
- Administrative and Support Services – 2,410 cases (10%)
- Manufacturing – 1,970 cases (8%)
If you’re operating in any of these industries, it’s worth keeping a close eye on your financial position.
The data suggests that pressures in these sectors are persistent and widespread.
What Should Company Directors Do?
If your company is struggling, you are not alone and you are certainly not failing.
Insolvency figures show that thousands of directors are making difficult but rational decisions in a tough climate.
Here’s what we recommend:
✅ Assess your cash flow
Are you managing to cover key outgoings like wages, VAT, rent and loan repayments?
✅ Speak to your accountant or a licensed insolvency practitioner
They can help assess whether your business is viable or whether it’s time to explore formal options.
✅ Explore options like a CVL, CVA or restructuring plan
There’s no one-size-fits-all solution. The best course of action depends on your company’s unique position.
But the earlier you act, the more choices you’ll have.
Final Thoughts: Don’t Wait for Things to Get Worse
The May 2025 insolvency figures confirm what we’re hearing from directors every day.
Trading conditions remain difficult, and many businesses are at breaking point.
But insolvency doesn’t have to mean the end of your professional journey.
It can be the start of a fresh chapter. One where you’re no longer weighed down by legacy debts or a company that’s no longer viable.
At Business Helpline, we offer free, confidential advice 24/7 to directors of limited companies in financial difficulty.
Whether you’re looking for breathing space, considering closing your business, or want to understand your personal risk, we’re here to help.
📞 Speak to a Specialist Today
Call our helpline on 0800 088 2142 to speak with a licensed expert.
