Jodie Wildridge comments on February Insolvency Statistics

March 24, 2025

New statistics from the Insolvency Service show that corporate insolvencies increased by 2.9% in February 2025 to a total of 2,035 compared to January 2025’s total of 1,978, and decreased by 7% compared to February 2024’s figure of 2,188.

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

“The monthly increase in corporate insolvencies is driven by a rise in Compulsory Liquidations, which are at their highest level in more than five years, while the year-on-year reduction is due to a fall in Creditors’ Voluntary Liquidations (CVLs) and Administrations. Compulsory liquidations are often initiated by HM Revenue and Customs or local authorities as a measure of last resort and the increase indicates a toughening of the position towards debts owed by companies to the public sector and the ongoing efforts of government to help balance their books.

“A number of economic and political issues are continuing to drive insolvencies and affect businesses across the supply chain. High costs and cautious consumer and client spending mean creditors are being more aggressive about pursuing the money they are owed and aren’t afraid to turn to the courts to recover outstanding debts, while a large proportion of directors of insolvent businesses feel closure is the only option open to them after years of trading through tough conditions and with little hope of these improving in the short-term.

“From a sectoral perspective, retail and hospitality firms are continuing to suffer as consumers continue to cut back their discretionary spending, while construction output has been affected by a fall in new work and poor weather, and manufacturing has continued to be affected by cost and trade issues, which have hit demand and output levels. All of these sectors have had to contend with continuing increases in costs alongside these challenges, and are likely to be among those most affected by the NI changes that are being introduced in April.”