Company Insolvencies February 2025

Published on 25^th March 2025

Overview of Insolvency Trends

The latest data on company insolvencies in February 2025 paints a concerning picture for many industries, with construction continuing to bear the brunt of high insolvency numbers. In February 2025, the number of registered company insolvencies in England and Wales was 2,035, reflecting a 3% increase compared to January 2025. However, this marks a 7% decrease when compared to February 2024, indicating a slight decline from the record levels seen in 2023.

Insolvency breakdown:

• 393 compulsory liquidations
• 1,520 creditors’ voluntary liquidations (CVLs)
• 115 administrations
• 7 company voluntary arrangements (CVAs)
• No receivership appointments

For the 12-month period ending February 2025, the insolvency rate stood at 52.4 per 10,000 companies, equivalent to one in every 191 companies entering insolvency. Although this rate is lower than the peak levels observed during the 2008-09 recession, it remains significantly higher than historical averages.

Construction: The Hardest-Hit Sector

The construction industry continues to face the highest number of insolvencies, accounting for 17% of all company insolvencies in the 12 months leading to January 2025. With 4,031 construction firms failing, it remains a key area of concern.

The ongoing pressures facing the construction sector are not new, but they have intensified in recent months

With the introduction of increasing National Insurance (NI) contributions for employers this will undoubtedly add further strain to businesses across the sector. The government’s decision to raise employer National Insurance rates in an effort to fund social care and the NHS means that construction companies will face higher costs for their workforce at a time when cash flow and profitability are already under pressure. These increased costs may be particularly burdensome for smaller firms that have tighter margins and limited cash reserves.

This change has added another layer of financial uncertainty for construction companies. The higher National Insurance contributions, combined with other economic pressures, are forcing many to reassess their staffing levels and operational capacity, which could potentially delay or scale back ongoing projects.

Outlook & Next Steps for Credit Managers

While recent interest rate cuts offer some relief, construction firms still face significant risks. Proactive credit management is crucial.

At Top Service, we help credit professionals:
Spot Early Warning Signs using real-time payment and trading data
Maximise Cash Flow through expert insights and credit solutions
Recover Overdue Invoices using our specialist recovery services, ensuring you get paid faster and reduce bad debt exposure

Don’t wait until it’s too late—take action now. Call us at 01527 503990 to protect your business.