Company Insolvency Statistics May 2026: Insolvencies Fall 16% Year-on-Year
The latest company insolvency statistics for May 2026 show a notable reduction in the number of businesses entering formal insolvency procedures across England and Wales.
According to figures published by the Insolvency Service, 1,868 company insolvencies were registered during May 2026. This was:
- 10% lower than April 2026, when 2,087 insolvencies were recorded
- 16% lower than May 2025, when there were 2,231 insolvencies
Although the reduction is encouraging, the wider picture remains challenging. Company insolvency levels continue to be high by historical standards, with many directors still facing pressure from tax liabilities, rising costs, weakened cash flow and overdue creditor payments.
Company insolvencies in May 2026 by procedure
The 1,868 insolvencies registered in England and Wales during May consisted of:
|
Insolvency procedure |
May 2026 |
Change from April 2026 |
Change from May 2025 |
|
Creditors’ voluntary liquidations |
1,423 |
Down 5% |
Down 18% |
|
Compulsory liquidations |
285 |
Down 26% |
Down 17% |
|
Administrations |
135 |
Down 24% |
Down 5% |
|
Company voluntary arrangements |
25 |
Up 25% |
Up 79% |
| Receivership appointments |
0 |
— |
— |
|
Total company insolvencies |
1,868 |
Down 10% |
Down 16% |
The figures for England and Wales are seasonally adjusted where appropriate. They remain provisional and may be revised in future releases.
Creditors’ voluntary liquidations remain the dominant procedure
Creditors’ voluntary liquidations accounted for approximately 76% of all company insolvencies during May 2026.
A CVL is a director-led process used to close a company that can no longer pay its debts. Although creditors ultimately vote on the appointment of a liquidator, the procedure begins when the company’s directors recognise that the business is insolvent and decide to take formal action.
There were 1,423 CVLs in May, representing an 18% reduction from the 1,730 recorded in May 2025. The average monthly number of CVLs during the first five months of 2026 was also 7% lower than the monthly average for 2025.
This suggests that voluntary liquidations have eased from their recent peaks. However, CVL numbers remain elevated in a longer-term historical context. The four years from 2022 to 2025 produced the four highest annual totals since the CVL series began in 1960.
Administration numbers return towards normal levels
There were 285 compulsory liquidations in May 2026, down 26% from April and 17% compared with May 2025.
A compulsory liquidation normally follows a winding-up petition presented by a creditor. If the court makes a winding-up order, the company is placed into liquidation and control passes away from its directors.
The reduction in May is welcome, particularly after compulsory liquidation numbers reached their highest annual level since 2012 during 2025. Nevertheless, a single month’s decline does not necessarily indicate that creditor enforcement pressure has disappeared.
Directors who receive a statutory demand, winding-up petition or other formal recovery action should seek advice immediately. The available options can become significantly more limited once a winding-up petition has been advertised or a winding-up order has been made.
CVAs increased, but overall numbers remain low
Company voluntary arrangements were the only major insolvency procedure to increase during May.
There were 25 CVAs, compared with 20 in April 2026 and 14 in May 2025. This represents a 79% year-on-year increase, but the percentage should be treated carefully because it is calculated from a comparatively small number of cases.
A CVA allows an insolvent company to propose an arrangement under which some or all of its debts are repaid over an agreed period. If approved by the required majority of creditors, the company can continue trading while making the agreed payments.
The increase may suggest that more companies are attempting to restructure rather than close. However, CVAs still accounted for only around 1% of company insolvencies in May, and their use remains low compared with historical levels.
A CVA will not be appropriate for every company. The underlying business usually needs to be capable of generating enough sustainable cash flow to meet both its ongoing liabilities and the proposed arrangement payments.
The longer-term insolvency rate has also declined
The rolling company insolvency rate provides a more reliable indication of the longer-term trend than one month’s total.
In the 12 months ending 31 May 2026, the insolvency rate in England and Wales was 50.9 per 10,000 companies on the Companies House effective register. This is equivalent to approximately one in every 196 companies entering insolvency.
That compares with 53 insolvencies per 10,000 companies in the 12 months ending May 2025.
While insolvency volumes over recent years have been among the highest recorded since the 2008–09 recession, the rate remains considerably below the recession-era peak of 113.1 insolvencies per 10,000 companies. This is partly because the number of companies registered at Companies House has more than doubled over that period.
Which industries are recording the most insolvencies?
The six industries with the highest numbers of insolvencies in the 12 months ending May 2026 were:
- Construction – 3,803 insolvencies
- Wholesale and retail trade, including motor vehicle repairs – 3,527
- Accommodation and food service activities – 3,296
- Administrative and support service activities – 2,221
- Professional, scientific and technical activities – 1,958
- Manufacturing – 1,872
Construction alone accounted for 17% of cases where an industry could be identified.
However, these figures measure the number of insolvencies rather than the failure rate within each industry. Larger sectors naturally tend to record more insolvencies because they contain more registered companies.
Business Helpline’s view
The fall in company insolvencies during May is positive, particularly because the reduction was spread across CVLs, compulsory liquidations and administrations.
However, it would be premature to conclude that the financial pressure facing UK companies has passed.
The May total returned to levels similar to those seen between November 2025 and February 2026, following increases during March and April. The figures therefore look more like an easing from two elevated months than evidence of a decisive change in the longer-term trend.
CVLs still accounted for more than three-quarters of all insolvencies, showing that a substantial number of directors continue to reach the point where they believe their company cannot be rescued.
The reduction in compulsory liquidations is also encouraging, but directors should not wait for creditor action before seeking support. Acting earlier generally creates more room to review options such as:
- Negotiating manageable payment arrangements with creditors
- Refinancing or restructuring existing business debt
- Improving short-term cash flow
- Proposing a company voluntary arrangement
- Placing the company into administration
- Closing an insolvent company through a creditors’ voluntary liquidation
The right option will depend on whether the company remains commercially viable, the value of its assets, the level and type of debt, creditor pressure and its ability to generate future cash flow.
What should directors do if their company cannot pay its debts?
Warning signs of potential insolvency can include:
- Falling behind with PAYE, VAT or Corporation Tax
- Repeatedly using money reserved for tax to meet other costs
- Being unable to pay suppliers within agreed terms
- Relying on overdrafts or personal funds to cover routine expenses
- Receiving statutory demands, court claims or enforcement notices
- Having insufficient cash to pay wages
- Taking new borrowing simply to repay existing debt
Experiencing one of these issues does not automatically mean that a company must be liquidated. It does mean that directors should review the company’s position carefully and avoid allowing debts to increase without a realistic repayment plan.
Once directors know, or ought to know, that insolvent liquidation or administration cannot reasonably be avoided, their decisions should prioritise the interests of creditors as a whole.
Confidential advice for company directors
If your company is struggling with debt, seeking advice does not commit you to liquidation or any other formal procedure.
Business Helpline provides confidential, unbiased advice to directors of limited companies. We can help you understand your company’s financial position, explain the available options and determine whether the business could be rescued or should be closed in an orderly way.
Call our free 24-hour helpline on 0800 088 2142.
