UK business insolvencies surge 16.7% as economic pressures tighten in 2025
Company insolvencies in the UK rose sharply in October 2025, with figures climbing by 1.7% from the previous month. Compared to the same period last year, the increase reached 16.7%, reflecting ongoing economic strain. Experts warn that weak growth, high costs, and debt pressures continue to push businesses towards collapse.
A total of 2,029 winding-up orders were recorded in October. This included 301 compulsory liquidations, 1,592 voluntary liquidations, and 119 administrations. The construction sector led in insolvencies over the past year, while transport, logistics, and hospitality also faced severe difficulties.
Between July and September 2025, transport and logistics suffered the highest insolvency rate at 10.1 per 10,000 companies. Construction followed with 8.9 insolvencies per 10,000, and hospitality recorded 8.2. Small and medium-sized businesses, along with sectors like automotive, were hit hardest by rising energy costs and tight financing conditions.
Matthew Richards, head of restructuring at Azets, blamed the surge on political uncertainty, cost pressures, and HMRC’s aggressive debt collection. Simon Edel of EY-Parthenon urged firms to prioritise liquidity to manage debt burdens in the tough economic climate. Richards also warned that insolvencies would likely keep rising as Christmas approaches, with sluggish growth and rising unemployment adding to the strain.
The latest figures highlight a worsening insolvency crisis, driven by economic weakness and financial pressures. With experts forecasting further increases, businesses—especially in vulnerable sectors—face an uncertain end to the year. Many will need to strengthen cash reserves or risk collapse in the coming months.
