More than 24,000 UK businesses set to fail this year
The trading environment for many small businesses remains extremely difficult, as evidenced by the mixed picture coming out of the insolvency data for June 2025, which was published on Friday (18 July).
Whilst June corporate insolvency rates fell by 8% when compared to May, PwC analysis indicates that small businesses are continuing to bear the brunt, with approximately 97% of all corporate insolvencies in June being companies with annual revenue below £1 million or with assets less than £5 million.
Insolvency rates for the first half of 2025 are tracking at similar levels to 2024, which would translate to more than 24,000 businesses failing this year if current rates are maintained, the firm said.
“Whilst the respite in June is welcome, the year-to-date insolvency rates, when compared to last year, demonstrate that the sustained financial pressure on businesses shows no sign of easing. And smaller companies – often the lifeblood of the UK economy – are feeling the brunt of the pressure,” said David Kelly, Head of Insolvency at PwC.
While lenders and financial stakeholders remain open to supporting businesses, many smaller firms delay engaging with them, making it harder to secure funding, before creditors intervene, said Kelly.
“It is concerning that compulsory liquidations where creditors are initiating the liquidation process are up 20% this year compared to the same period in 2024.
“The Construction, retail, hospitality and leisure sectors continue to face the greatest pressure. The data also indicates a rise in insolvencies among small consultancy and advisory firms,” he said.
