The Insolvency Service’s latest statistics for December 2025 reveal a small decrease when compared with the previous month, but zooming out shows a difficult environment.
Data published on Tuesday (20 January) shows total company insolvencies were 1,802 in December, compared with 1,990 in November and 2,177 in October.
However, across 2025, total company insolvencies reached 25,561, broadly consistent with the levels seen in 2024 (25,421) and 2023 (26,616).
“This shows that the elevated levels seen in the years following the Covid pandemic have persisted – total insolvencies in 2020 were 13,421. Notably, over 95% of companies entering insolvency had turnover below £1m, and the sectors most affected remain construction, retail and hospitality and leisure,” said David Baxendale (Restructuring Partner at PwC).
“We’re also seeing increased use of legal processes by both companies and HMRC to recover debts. In 2025 winding up petitions were 13% higher than in 2024, with HMRC responsible for more than 54% of all petitions issued,” he said.
Baxendale noted that 2025 was ultimately a challenging year for many businesses.
“Interest rates and inflation have not eased as quickly as many would have hoped, while employment costs continue to rise. Alongside these supply side pressures, demand has been affected by fragile consumer and corporate sentiment.
“The patterns we’re seeing in insolvency levels, company size and sector impact are consistent with recent years and given the current landscape, are likely to continue into the early months of 2026,” he said.
Personal insolvencies
Of particular concern is that the number of people becoming financially insolvent across England and Wales jumped to a 15-year high last year.
The number taking out debt relief orders [DROs] was at its highest since the introduction of this type of insolvency in 2009, with 46,939 recorded in 2025.
The Insolvency Service said that a total of 126,240 personal insolvencies were recorded last year. This was 7% higher than in 2024 and the highest number since 2010 when 134,971 cases were recorded during the aftermath of the financial crisis.
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