EY comments on Insolvency Service March 2025 company insolvency data

Simon Edel, UK Turnaround and Restructuring Strategy Partner at EY-Parthenon, said: “Despite a slight fall in insolvency activity in March, there has been another uptick in Creditors’ Voluntary Liquidations (CVLs). There has also been a 17% increase in administration activity compared to February, which is 30% higher than March 2024.

“For many businesses, ongoing pressures such as the impact of higher costs, falling business confidence and slow growth came to a head last month as the tax year and, for many businesses, the financial year came to an end.

“On top of these pre-existing challenges, companies are now also dealing with increased employer National Insurance Contributions and the National Living Wage, as well as the potential impact of US trade tariffs. Higher interest rates, increased working capital demands and a difficult credit environment are intensifying liquidity issues for more UK businesses, causing some to choose to call time on their companies rather than looking at rescue options.

“Whilst the volume of company insolvencies continues to be driven by SMEs and CVLs, we are now starting to see stress spread to some mid-market and larger companies, many of which are facing refinancing hurdles.

“Looking ahead, it’s critical that companies focus on opportunities to improve their liquidity to reduce debt requirements, as well as being able to demonstrate a robust trading performance and reliable forecasts to avoid facing challenges when refinancing.

“Since the introduction of the Corporate Insolvency and Governance Act (CIGA) in 2020, 36 restructuring plans have been sanctioned to date. We know that approximately six plans have either not been sanctioned or discontinued. However, it's worth noting that there is a relatively low number of larger insolvency filings, with a focus on more operational restructuring and consensual solutions.”