UK Company Insolvency Statistics 2026: CVLs, Administrations and Sector Data

DATA | COMPANY INSOLVENCY | INSOLVENCY SERVICE SOURCE

What are the types of company insolvency?

Company insolvency in England and Wales takes several forms. Understanding which procedure applies is important for directors, creditors and employees who are affected. The four main procedures are creditors' voluntary liquidation (CVL), compulsory liquidation, administration and company voluntary arrangement (CVA).

Company insolvency procedures compared

Source: Insolvency Service / Companies House. May 2026 figures seasonally adjusted.

Figures are seasonally adjusted estimates for England and Wales. Scotland and Northern Ireland reported separately.

Sectors most affected by company insolvency

Construction has been the sector with the highest volume of company insolvencies consistently since 2022. In the 12 months to May 2026, there were 3,931 construction insolvencies -- 17% of all company insolvencies in England and Wales. Rising material costs, National Insurance contribution increases (from April 2025), labour shortages, delayed payments from clients and thin margins on fixed-price contracts have all contributed to the sector's vulnerability.

The real estate sector experienced a sharp increase in insolvencies in March and April 2026, driven by a cluster of more than 200 connected real estate companies entering administration across those two months. This reflects a refinancing shock in commercial property -- properties that were refinanced at low rates in 2019-2021 are now facing significantly higher debt servicing costs at renewal, combined with falling commercial property values particularly in retail and office sectors.

Retail and hospitality remain under sustained pressure from elevated energy and labour costs, shifting consumer behaviour and reduced discretionary spending. During May 2026, high-profile retail failures included Radley London (pre-pack administration) and Quiz Clothing (store closure programme).

Long-term context: why current levels look high but the rate is not

The absolute number of company insolvencies is currently running at broadly similar levels to the 2008-09 recession peak. However, the insolvency rate -- the proportion of all registered companies entering insolvency -- is approximately half the 2008-09 peak of 113.1 per 10,000 companies. The reason is that the number of companies on the Companies House register has more than doubled since 2009, from around 2 million to over 5 million registered companies.

The 2020-21 dip in insolvencies was artificial -- government COVID-19 support measures (furlough, CBILS loans, bounce-back loans, HMRC payment deferrals and a moratorium on winding-up petitions) suppressed formal procedures. Once support ended, a wave of CVL filings followed in 2022-2024 as companies that had effectively stopped trading during COVID formally wound down. HMRC returning to active debt enforcement from 2022 also contributed to rising compulsory liquidation numbers as the tax authority resumed pursuing companies with accumulated PAYE, NIC and VAT arrears.

What is a CVL and why do directors choose it?

A creditors' voluntary liquidation (CVL) is the most common form of company insolvency. Directors propose the liquidation to shareholders (who approve it), and a licensed insolvency practitioner is appointed as liquidator. The liquidator realises the company's assets, distributes the proceeds to creditors in a statutory order of priority, and dissolves the company.

Directors choose CVL over compulsory liquidation because it allows an orderly wind-down on the company's own terms rather than having a court-appointed liquidator imposed by a creditor. CVLs also give directors some protection from accusations of wrongful trading, provided they act promptly once they know the company cannot avoid insolvency. Directors who continue to trade -- taking on more debt or paying some creditors preferentially -- when they knew or should have known insolvency was inevitable can face personal liability.

The rise in CVLs reflects that directors are increasingly proactive in recognising unviable businesses and taking formal steps, partly driven by better awareness of wrongful trading risk and partly because advisers (particularly accountants) are recommending CVL as a clean exit strategy.

What is the current UK company insolvency rate?

In the 12 months to May 2026, one in 196 companies on the Companies House effective register (50.9 per 10,000) entered insolvency in England and Wales, according to the Insolvency Service. This is lower than the 53.0 per 10,000 rate recorded in the 12 months to May 2025, suggesting a slight improvement in the trend despite elevated absolute volumes. Scotland and Northern Ireland report separately -- Scotland recorded 107 insolvencies in May 2026, Northern Ireland recorded 40.

Why is construction the sector most affected by insolvencies?

Construction companies face a combination of structural vulnerabilities: thin margins on fixed-price contracts, long payment chains where main contractors can delay payments to subcontractors, high sensitivity to material and labour cost inflation, and limited ability to pass cost increases through to clients on agreed contract prices. The sector also has a high proportion of small and micro businesses with limited financial reserves. National Insurance contribution increases from April 2025 added further wage cost pressure at a time when material prices remained elevated and client budgets were tight.

What happens to employees when a company enters administration or CVL?

When a company enters CVL or compulsory liquidation, employees are typically made redundant on or shortly after the appointment of the liquidator. Employees can claim redundancy pay, notice pay, holiday pay and some arrears of wages from the National Insurance Fund via the Insolvency Service -- subject to statutory limits (currently capped at one and a half weeks' pay per year of service for redundancy, with a weekly pay cap). In administration, some employees may be retained if the administrator is attempting to sell the business as a going concern, but redundancies are common.

Where is the next company insolvency statistics release?

The Insolvency Service publishes monthly company insolvency statistics approximately three weeks after the end of the reporting month. The June 2026 statistics are expected in mid-to-late July 2026. Statistics are published at gov.uk/government/collections/company-insolvency-statistics-releases.