Company Insolvency Update January 2025

Published on 20^th February 2025

The latest data on company insolvencies for January 2025 reveals a continuing trend of high insolvency numbers, despite a slight decrease from the record levels of 2023. The construction industry has been particularly affected, continuing to report the highest number of insolvencies across all sectors. Below is a detailed analysis of the insolvency landscape, with a focus on construction.

Overall Numbers and Trends

There were 1,971 company insolvencies in January 2025, marking a 6% increase from December 2024 (1,852) and an 11% rise compared to January 2024 (1,780). Although insolvencies remain high relative to historical levels, they are slightly lower than in 2023, which saw a 30-year peak.

The breakdown of insolvencies includes:

• 269 compulsory liquidations
• 1,546 creditors’ voluntary liquidations (CVLs)
• 142 administrations
• 14 company voluntary arrangements (CVAs)
• No receivership appointments

The rate of insolvency for the 12 months ending January 2025 was 52.6 per 10,000 companies, indicating that one in 190 companies entered insolvency during this period. 

Construction Industry at the Forefront of Insolvencies

The construction sector has been particularly hard-hit, accounting for 17% of all company insolvencies in 2024, with 4,032 firms going under. A combination of economic pressures and industry-specific challenges have intensified financial strain, leading to a rise in insolvencies. 

Breakdown by Insolvency Type

• Creditors’ Voluntary Liquidations (CVLs): Accounted for 78% of all insolvencies in January 2025. CVLs increased by 9% from December 2024 and were 14% higher than January 2024.
• Compulsory Liquidations: Decreased by 5% from December 2024 and 5% from January 2024.
• Administrations: Increased by 10% from December 2024 and 9% from January 2024.
• Company Voluntary Arrangements (CVAs): Declined by 13% from January 2024 and 18% from December 2024.
• Receivership Appointments: None were recorded in January 2025, continuing the trend of extremely low numbers in recent years.

Moratoriums and Restructuring Plans

Only one moratorium was registered in January 2025, and no restructuring plans were recorded. Since the introduction of these procedures in 2020, a total of 50 moratoriums and 26 restructuring plans have been registered at Companies House.

Conclusion

While the number of company insolvencies remains high, the figures for January 2025 suggest a mixed picture. The decline in compulsory liquidations and continued rise in CVLs reflect ongoing economic challenges. However, the construction sector remains a key area of concern, with persistent financial pressures leading to the highest number of insolvencies across all industries.

Looking ahead, the recent interest rate reduction offers a glimmer of hope for the construction sector, potentially easing financing conditions and improving demand in the housing market. However, the full impact will depend on broader economic trends, inflation levels, and the confidence of investors and developers.

For businesses in construction and beyond, proactive financial management and reacting to early warning signs remain crucial in navigating uncertain economic conditions.

We invite credit management teams across industries to make the most of the tools and services we offer:

Through our up to the minute trading experiences you can actively monitor payment patterns and the financial health of your customers and customer customers to stay ahead of potential issues.

Take advantage of our services to optimise cash flow management and effectively mitigate risks.

For tailored advice on overcoming financial challenges, contact us at 01527 503990.