Registered company insolvencies in the UK rose by 2.9% in February 2025, with 393 companies facing compulsory liquidation, according to business advisory group Azets.
Azets is an international business advisory group, employing 9,000 experts across 190 locations in eight countries, with more than 100,000 clients.
The company said there were 1,520 creditors’ voluntary liquidations (CVLs), 115 administrations, and seven company voluntary arrangements (CVAs) in the same period.
In 2024, the total number of insolvencies reached 23,872, marking a slight decline from the previous year’s peak of 25,158, the highest level since 1993. Despite the decrease, the figures are described as telling a “concerning story”.
More than 18,000 insolvencies were attributed to voluntary liquidations, suggesting that a significant number of businesses are choosing to close rather than attempt recovery strategies.
Robert Young, Partner in the UK Restructuring and Insolvency team at Azets, said: “It’s notable how many businesses are opting for voluntary liquidation, which typically means the business ceases trading entirely. This contrasts with administrations or CVAs, which can offer a lifeline to preserve jobs and protect creditor interests.
Young cautioned that businesses are becoming increasingly vulnerable to rapid changes in both global and domestic conditions.
“Gone are the days when UK business owners could afford to focus solely inward. Geopolitical volatility, regulatory changes, and domestic fiscal policies all have a direct impact – often overnight. We’ve seen incredible resilience over recent years, but many businesses are understandably operating in survival mode,” Young added.
A recent survey by Azets revealed that 46% of businesses anticipate improved performance in 2025.
However, only one-third of businesses intend to expand their workforce, and projections for capital expenditure have sharply declined, falling from 47% in 2023 to just 28% in 2025.
Moreover, 75% of businesses expect operating costs to increase.
One key concern, according to Young, is the tendency for directors to delay action until it is too late.
He emphasised the legal and financial risks faced by directors who fail to act promptly.
“What we consistently see is that the earlier advice is sought, the more options are available – whether that’s restructuring debt, securing fresh funding, or pursuing formal rescue mechanisms.”
He added: “If businesses enter the ‘zone of insolvency’, directors must be aware of their statutory duties. Failing to act on financial warning signs can lead to personal liability or even disqualification.
“I encourage business leaders to maintain up-to-date financial information, engage regularly with stakeholders, and take early professional advice – before cash pressures limit their options.”
