Latest figures from the Insolvency Service have shown that the number of business insolvencies in England and Wales fell to 1,868 in May 2026, 10% lower than in April 2026 (2,087), and 16% lower than the same month in the previous year (2,231 in May 2025).
The insolvencies consisted of 285 compulsory liquidations, 1,423 creditors’ voluntary liquidations (CVLs), 135 administrations and 25 company voluntary arrangements (CVAs). There were no receivership appointments.
CVLs accounted for 76% of all company insolvencies. The number of CVLs was 5% lower than April 2026 and 18% lower than May 2025. The average number of CVLs in the first five months of 2026 was 7% lower than the average monthly number in 2025. Numbers of both compulsory liquidations and CVLs in May 2026 were lower than in April 2026 and lower than the 2025 monthly average.
The number of compulsory liquidations was 26% lower than in April 2026 and 17% lower than in May 2025. Compulsory liquidations in May 2026 were 8% lower than the 2025 monthly average.
There were 135 administrations, 24% lower than in April 2026 when more than 70 connected companies in the real estate sector entered administration and 5% lower than in May 2025, but 8% higher than the 2025 monthly average. Administrations were 24% lower than in April 2026, when more than 70 connected companies in the real estate sector entered insolvency and 5% lower than in March 2025.
The 25 CVAs in May 2026, 25% higher than in April 2026, and 79% higher than May 2025. The average level of CVAs in the first five months of 2026 was higher than the annual monthly average since 2021. Numbers remain low compared to historical levels. CVAs are not seasonally adjusted due to low volumes.
Commenting on the Insolvency Service’s latest monthly statistics, Sonia Jordan, President of R3 and Partner at Knights, said “Corporate insolvencies saw a 10% monthly decline in May, with 1,868 cases, which is welcome news given April saw numbers at their highest level since June 2024. Levels were also down by 16% on May 2025. This month’s figures consisted of 285 compulsory liquidations, 1,423 creditors’ voluntary liquidations (CVLs), 135 administrations and 25 company voluntary arrangements (CVAs).
“However, alongside these figures, new data from the Insolvency Service on business insolvency demographics highlights the longer-term pressures facing certain sectors. There were 22,455 business insolvencies in 2025, with accommodation and food services recording the highest insolvency rate not just last year, but consistently over the past decade. This underlines the sustained pressure on the hospitality sector.
“Looking ahead, the prospect of a ‘World Cup bounce’, especially if England and Scotland progress in the tournament, could provide an uplift in trade for pubs, restaurants and shops helping to improve cashflow for some sectors.
“Business owners will also be hoping for a more positive outlook following the deal reached between the US and Iran though it will take time for this to translate into better trading conditions.
“Set against this, the broader economic backdrop remains challenging. Political uncertainty in the UK continues to weigh on consumer and business confidence, offsetting the benefits of stabilising inflation and the hold in interest rates.
“At the same time, manufacturers are warning that persistently high energy costs are threatening the viability of some firms, with a growing number considering moving production overseas to remain competitive.”
Giuseppe Parla, Restructuring & Insolvency Director at Menzies LLP, said “Beneath the surface of a recent surge in summer spending, Britain’s pubs, retailers and tourist attractions still face a period of tax rises, dwindling demand and mounting financial pressure that risks drying up one of the UK’s biggest economic contributors.
Warmer weather has lifted the tills, and Government measures around this summer’s sporting events present an effort to support the sector, from longer opening hours to a temporary VAT cut for family attractions. But none of it changes the structural problems facing them. Households have less to spend, energy, labour, oil and food prices remain elevated, and the question for many operators is whether short-term measures will be enough to offset what is stacking up against them.
Higher pint prices, reduced business reliefs and a proposed tourist tax all add cost and complexity at the exact moment firms are trying to capitalise on seasonal demand. A recent multimillion pound package to help communities take ownership of local pubs does little for the owners running them and could signal the Chancellor’s last stand to save UK hospitality as we know it.
Our message is clear. Use this summer period as an opportunity to strengthen operations and review costs, and seek professional guidance if pressure is already building. In a challenging economic environment, taking expert advice at the first sign of distress opens up more options to protect value, preserve jobs and secure long-term financial stability.”
Robert Young, Restructuring and Insolvency Partner at Azets, said “The monthly and annual fall in corporate insolvencies reflects the change in Compulsory Liquidation numbers, which are down from a 10 year high last month, and the change in Creditors’ Voluntary Liquidation numbers from May last year – a month in which many employers were entering a CVL in response to the increased NI costs that were introduced in April. Directors running out of fight, firepower and finance is still a problem, and creditors remain willing to turn to the courts to recover monies owed – and neither of these are going to change in the short-term.
“The reality is that despite the fall in insolvencies compared to last month and last May, numbers are still high and businesses are still struggling – with many are facing an uncertain future. Geopolitical issues, increases in costs, political uncertainty, a lack of affordable finance, and creditors chasing overdue debts in an attempt to pay their own bills are just some of the issues that driving firms into financial distress. Unless the climate becomes easier and some way is found of lightening the cost load on businesses, it’s likely demand for advice and support will remain high in the coming weeks and months as more firms feel the effects of the challenging trading climate.
“The economic ripple effect of the war in Iran continues to take its toll. It has led to an increase in operating costs, affected investment and recruitment plans, and seen some firms increase prices and review suppliers in a bid to try and manage its effects. The signing of the initial deal is positive and may allay fears that this would become a perma-crisis. However, it appears to be very high-level, so complex and protracted negotiations will need to follow. Whilst it remains so fragile, the ‘deal’ is unlikely to completely reverse the negative impacts that have resulted from the conflict.
“Closer to home, increasing speculation about the prime minister’s future is also unhelpful for business confidence. With a possible leadership contest looming and a possible change in direction of the Government, businesses in certain sectors may be wary of investing, expanding or borrowing amid the political uncertainty.”
“Alongside this, businesses are sprinting to keep up with rising expenses. The start of the new financial year has brought an increase in business rates, the cost of hiring and retaining staff has soared, and energy bills are set to rise once again. Businesses will be sandwiched between having to pay higher energy bills and seeing their customers cut back on spending as they look to find the funds to pay their own. This will deal them another cost blow in the short-term and as we move into the winter months.
“From a sectoral perspective, hospitality, retail and construction continue to struggle. The fact that several household names have entered restructuring or insolvency processes recently shows the strain on the restaurant sector is becoming unbearable as the double blow of increased expenses and cautious consumers continues to affect it.
“Despite a rise in footfall and sales, retailers continue to be crushed by costs. News of TG Jones looking to enter a restructuring plan shows that even firms who are part of the history of the high street aren’t safe from financial distress, and ongoing issues around employment and business costs continue to affect firms across the sector.
“And the construction industry continues to suffer as rises in labour and the price of materials put further strain on already tight project margins, and ongoing issues around late payment make cashflow control increasingly difficult and tip more firms towards financial distress.
“Our advice to anyone who is worried about their business is to pick up the phone and speak to an adviser. It’s incredibly hard to voice your concerns about your finances but the earlier you do, the more potential solutions you have open to you and the more time you have to consider how you move forward.”
Oliver Collinge, Partner at PKF Littlejohn Advisory, said “The fall in registered company insolvencies in England and Wales in May is a welcome sign, with numbers down both month-on-month and compared to the same period last year. However, many businesses will still be operating in a challenging environment, with rising costs, tighter credit and uncertain demand continuing to put pressure on cashflow.
“Hospitality and construction firms continue to bear the brunt of insolvencies, with the two sectors accounting for close to a third (31%) of company insolvencies for May. It therefore remains important and imperative for businesses to plan ahead and seek early advice if financial difficulties begin to emerge.”
Lisa Cleaver, COO of eCapital said “Insolvency figures may be stabilising, but it would be a mistake to read that as pressure easing. Rising input costs, margin pressure and increasingly stretched payment terms over the past decade have created sustained strain on cash flow, making any sudden financial shock harder to absorb.
“What we hear from SMEs navigating current market conditions is that supply chain volatility has made forward planning increasingly difficult – and yet they are still expected to pay suppliers promptly, even when their own customers are slow to settle. This has led many to turn to short-term borrowing to bridge gaps in cash flow. Over time, that can result in businesses relying on multiple facilities at once, increasing complexity and cost. When these pressures become unmanageable, some businesses can find themselves facing insolvency.
“Long-term, structured working capital solutions provide a more stable way of managing cash flow. Solutions such as invoice finance can reduce reliance on reactive borrowing and create a more predictable, controlled approach to managing finances.”
James Hawksworth, Restructuring Advisory partner at RSM UK said: “Today’s figures show yet again the vulnerability of the construction sector to global geopolitical events. More critically though, it is the smaller more specialised companies with the least financial resilience that appear to be suffering the most. The uptick in insolvencies over the past 3 months in this specific area of the market makes it increasingly clear that those entities lower in the supply chain will feel the most pain. If this trend continues, it could ultimately lead to fewer suppliers and increased costs for the larger contractors in the sector.
“The latest insolvency data for the sector follows the trend set in the first quarter of 2026 for numbers of winding up petitions filed by trade creditors in the sector. The number of filings in Q1 2026 represented the highest number of winding up petitions issued by trade creditors since the financial crisis – a further indicator of the major underlying pressures and structural challenges in the sector.
“The increasing cost of energy and materials are feeding through to the supply chain, squeezing margins that are already stretched, while at the same time economic uncertainty and legislative changes knock investor appetite.
“The greater pressure placed on smaller companies is inevitable. Smaller or more specialist firms do not have the leverage to resist worsening credit terms with the larger contractors, nor have the agility to cope with significant price increases or project delays.
“Whilst tensions in the Middle East appear to have lessened as a result of the Iran-US accord this week, the medium-term consequences of the past three months will continue to have a negative impact until a greater degree of certainty is reached. In the meantime, businesses will continue to contend with heightened cost pressures, reduced investor appetite and uncertain economic conditions, with no clear indication of when current headwinds will ease.”
