3 Key Messages From The Latest Company Insolvency Statistics
The latest company insolvency statistics have been released by the Insolvency Service, shedding light on the financial health of businesses across England and Wales in January 2025. These figures offer a crucial insight into the current economic landscape, capturing the number of businesses that have been able to survive ongoing financial pressures. As always, the data includes detailed breakdowns of company insolvencies by type, covering compulsory liquidations, Creditors Voluntary Liquidations (CVLs) and administrations.
The beginning of the year is often a challenging time for businesses, particularly those that struggled through the Christmas period and found themselves unable to recover in the new year. For some, this financial strain may have been exacerbated by changing consumer spending habits and looming Budgetary pressures for the upcoming financial year. January’s insolvency statistics serve as a stark reminder of the difficulties faced by UK businesses amidst this tough economic backdrop.
To help you understand what the latest figures mean, we have identified the three main takeaways from January 2025’s company insolvency statistics.
Company Insolvencies On The Rise
The overarching headline from the January 2025 insolvency statistics is that the overall number of company insolvencies has risen. A total of 1,971 company insolvencies were recorded in England and Wales during the month, which represents a 6% increase compared to December 2024 and an 11% rise compared to January 2024.
The overall increase in company insolvencies suggests that many businesses are struggling to stay afloat despite hopes that economic conditions may stabilise. While some sectors, such as retail and hospitality, may have experienced temporary relief in late 2024 due to seasonal spending, January’s figures confirm that this was not enough to prevent financial distress in many cases. With CPIH inflation at its highest rate since March 2024, it is clear that businesses are continuing to feel the pressure.
CVLs Remain The Dominant Insolvency Process
One of the most telling trends within this month’s company insolvency statistics is the continued prevalence of CVLs. Out of the 1,971 insolvencies recorded in January, 1,546 cases were CVLs, making this the most common insolvency procedure by a significant margin.
A CVL is typically used by companies that recognise they are no longer financially viable and wish to wind down in a structured way. The process allows directors to take proactive steps to address creditor concerns rather than being forced into compulsory liquidation through HMRC and court action. The high number of CVLs therefore suggests that many company directors are acknowledging financial difficulties and choosing to close voluntarily rather than risk legal action from creditors.
For business owners facing mounting debts and creditor pressure, the data highlights the importance of acting early. Seeking professional advice before financial issues escalate can provide more options for resolution, whether through restructuring, rescue strategies, or liquidation on voluntary terms.
Compulsory Liquidations & Administrations Show A Mixed Picture
While many businesses are choosing a form of voluntary liquidation when faced with financial pressures, compulsory liquidations and administrations do still remain significant parts of the insolvency landscape. The latest company insolvency statistics reveal that there were 269 compulsory liquidations and 142 administrations in January 2025.
While the number of compulsory liquidations has slightly decreased compared to the previous month, they still represent a substantial proportion of overall company insolvencies. This suggests that creditors, including HMRC, are continuing to take a firm stance against companies that fail to meet their financial obligations.
Meanwhile, 142 administrations indicate that some businesses are still seeking restructuring opportunities rather than shutting down completely. The administration process grants breathing space while a restructuring plan is formulated, potentially allowing it to continue trading under new ownership or a revised business model. The presence of these cases in this month’s company insolvency statistics therefore offers a glimmer of hope that not all businesses facing distress are beyond rescue at this moment in time.
Next Steps For Your Business
January’s company insolvency statistics reinforce the general feeling that UK businesses continue to face financial challenges. The figures show that creditor pressure remains a real threat for businesses and that those in charge must address their financial difficulties in time.
If you are a company director concerned about insolvency, you must seek professional advice as soon as possible. Whether you need guidance on restructuring options, the suitable liquidation processes, or creditor negotiations, our licensed insolvency practitioners can help you navigate the complexities of financial distress.
Acting early can make all the difference in determining the best outcome for your business and its creditors so don’t hesitate to get in touch with the My Liquidation team right away.
