March 2025 Insolvency Statistics – demand for insolvency support still high

May 7, 2025

Latest figures from the Insolvency Service show that corporate insolvencies decreased by 2% in March 2025 to a total of 1,992 compared to February 2025’s total of 2,032 but increased by 9.1% compared to March 2024’s figure of 1,826.

Commenting on the figures, Jodie Wildridge, barrister at Exchange Chambers and deputy chair of the UK’s insolvency and restructuring trade body R3 in Yorkshire, said:

“The slight month-on-month reduction in corporate insolvency numbers is due to a fall in Compulsory Liquidations compared to last month’s figures. However, the latest corporate insolvency statistics are higher than they were a year ago and show that demand for insolvency support and the number of firms entering insolvency processes are still high.

“Creditors’ Voluntary Liquidation, Administration and Company Voluntary Arrangement numbers are higher than they were last month and last March, reflecting a business climate that is being shaped and buffeted by national and global political issues, which are adding further pressure on firms. Creditors also remain prepared to turn to winding-up orders to pursue monies owed, whether that is to recover money for the public purse in HMRC’s case, or to help address their own debts in the case of those creditors from the private sector.

“The announcement of the US tariffs and the rises in National Minimum Wage and Employers NI have caused directors most concern over the last few weeks. These have added further strain on businesses that have been dealing with increases in costs, and contractions and caution around spending for more than 18 months, all of which have hit margins, confidence, and in many cases, firms’ ability to stay solvent. For many small businesses particularly, an increase in late payments has a further knock on impact on liquidity and profitability, in already tight trading conditions for the small business community.”

Continued Jodie:

“While it is too early to understand the extent of the impact the tariffs will have on businesses, we know they will affect purchase and sale prices, and will subsequently affect margins and profits, and potentially firms’ ability to service debt and source rescue funding.

“At the same time, March was the last month before the National Insurance and Minimum Wage increases came in, and we know this has affected business confidence, recruitment and investment, as well as driving increases in enquiries for restructuring

advice and support. We will see the impact of this policy on businesses from this month, and from the next set of figures, but if firms have not made the most of the time between its announcement and introduction, we could see an increase in corporate insolvency numbers over the next quarter.”

Concluded Jodie:

“From a sectoral perspective, construction output has been affected by mixed weather since the start of the year and ongoing issues with payment and costs, while retail has seen a slowdown in spending as a result of this year’s late Easter. Hospitality spending has increased in recent months in part due to the warmer weather and as consumers seem more willing to spend money on going out than they had been previously.

“Restructuring Plans remain a key topic of discussion in the profession, with HMRC’s recent support in the Enzen and OutsideClinic cases sparking hope that this might further improve take-up of this process among mid-market firms. Questions still remain around how Restructuring Plans can be made accessible to SMEs, with cost being the biggest issue to resolve, and this is something the profession will continue to explore over this year as we work to find a solution.”