Company insolvency statistics record companies entering formal insolvency procedures after becoming unable to pay their debts.
The latest figures show that 1,845 companies entered insolvency in England and Wales during June 2026. This was almost unchanged from May 2026 and 10% lower than in June 2025.
Directors usually consider these figures after cash flow has tightened, creditor pressure has increased or the company has begun missing payments. The next step should be to review the company’s financial position and available options rather than assuming that formal insolvency is inevitable.
The statistics provide useful commercial context, but they do not establish that any individual director has acted improperly. A company may fail for many reasons, and entering an insolvency process does not automatically imply wrongdoing.
What do the June 2026 company insolvency statistics show?
The Insolvency Service’s June 2026 company insolvency statistics recorded 1,845 formal company insolvencies in England and Wales.
The total was made up of
- 1,364 creditors’ voluntary liquidations,
- 276 compulsory liquidations,
- 191 administrations; and
- 14 company voluntary arrangements.
There were no receivership appointments.
The overall number was almost identical to the 1,849 company insolvencies recorded in May 2026. It was also 10% lower than the 2,048 insolvencies recorded in June 2025.
This does not show a sharp improvement or deterioration in a single month. The figures instead indicate that formal insolvency volumes remain significant, although they have reduced compared with the same period in 2025.
The longer-term rate provides a more reliable measure than one month’s total. In the 12 months ending 30 June 2026, one in every 198 companies entered insolvency. This was equivalent to 50.5 insolvencies per 10,000 companies, compared with 52.4 per 10,000 in the preceding 12-month period.
Recent insolvency volumes have been at levels last seen around the 2008 to 2009 recession. However, the rate of insolvency remains considerably below the recessionary peak because the number of companies on the Companies House register has more than doubled since that period.
Directors should therefore avoid drawing conclusions from an isolated headline. The more important question is whether their own company can continue paying debts as they fall due and whether its assets remain sufficient to meet its liabilities.
Why do creditors’ voluntary liquidations remain the most common procedure?
Creditors’ voluntary liquidations accounted for 74% of all company insolvencies in June 2026.
There were 1,364 CVLs during the month. This was 3% lower than in May 2026 and 15% lower than in June 2025. The average monthly number of CVLs during the first half of 2026 was also 8% lower than the average for 2025.
Despite this reduction, CVL volumes remain high by historical standards. The four years up to and including 2025 produced the four highest annual CVL totals since the statistical series began in 1960.
A CVL is a formal liquidation process used where an insolvent company cannot continue trading and its shareholders resolve that it should be wound up. A licensed insolvency practitioner is appointed as liquidator and takes control of the company’s affairs.
For some directors, a CVL represents an orderly response to a company that no longer has a realistic prospect of recovery. It may allow the company to stop incurring further liabilities and place its assets under the control of an independent liquidator.
However, liquidation should not be treated as an automatic or administrative solution. Directors should first understand the company’s position, the causes of its financial difficulties and whether a viable restructuring or rescue option remains available.
Our guide to the voluntary liquidation process explains how a CVL begins and what directors can expect after a liquidator is appointed.
The liquidator will also review the company’s affairs and the conduct of its directors. That investigation is a standard part of the process and does not, by itself, mean that misconduct is suspected or has occurred.
Does the increase in administrations show that business distress is rising?
There were 191 administrations in June 2026.
This was 45% higher than in May 2026 and 80% higher than in June 2025.
Those percentages require careful interpretation.
Approximately 60 connected companies in the real estate sector entered administration during June. Across March, April and June 2026, approximately 260 connected real estate companies entered administration.
The rise was therefore materially influenced by a relatively small number of connected corporate groups. It should not be presented as evidence that administrations increased by 45% across businesses generally.
- Administration is designed to protect a company from creditor action while an administrator pursues one of the statutory purposes of the procedure.
- Depending on the circumstances, this may involve rescuing the company as a going concern, achieving a better result for creditors than liquidation or realising property for secured or preferential creditors.
The company’s directors usually remain in office, but their management powers are substantially restricted. The administrator assumes control of the company and determines how its business and assets should be managed.
The procedure may be appropriate where a viable business requires protection while a sale, refinancing or restructuring is explored. It may also be used where an orderly sale of the company’s business could preserve more value than an immediate liquidation.
Our guidance on company administration explains the process and the practical effect on directors.
The June figures should not cause directors to assume that administration is either necessary or available in every case. The correct process depends on the company’s underlying business, secured lending arrangements, cash requirements and prospects of recovery.
What do the latest figures mean for company directors?
The statistics are an early-warning indicator rather than a prediction about any individual company.
A director should be concerned with the company’s actual financial position. Relevant warning signs may include
- overdue tax,
- increasing supplier arrears,
- unpaid judgments,
- pressure from lenders,
- rejected payment arrangements; or
- an inability to meet payroll.
When a company is financially stable, directors are generally required to promote its success for the benefit of its members as a whole. As insolvency approaches, the interests of creditors become increasingly important.
Directors should obtain reliable and current financial information. This may include cash flow forecasts, aged creditor schedules, management accounts, tax liabilities, borrowing commitments and details of contingent claims.
Board decisions should be recorded carefully. The records should show what information was available, what options were considered and why the directors believed a particular course was appropriate.
Directors should also avoid taking steps that improve the position of one connected party at the expense of creditors generally. Payments to directors, repayments of director loan accounts, asset transfers and selective payments to particular creditors may receive close attention if the company later enters liquidation or administration.
Continuing to trade is not automatically unlawful merely because the company is experiencing financial difficulty. However, the board should regularly reassess whether there remains a reasonable prospect of avoiding insolvent liquidation or administration and whether continued trading is increasing losses to creditors.
Our directors’ duties guide explains how directors’ responsibilities may change when a company becomes financially distressed.
Taking advice does not mean that the company must immediately enter insolvency. It can help directors understand the available options, protect company value and demonstrate that decisions were made on an informed basis.
What options may be available before company liquidation?
Formal liquidation is only one possible outcome for a company experiencing financial pressure.
Where the underlying business remains viable, informal negotiations with creditors may provide time to address a temporary cash flow problem. This may involve revised payment terms, refinancing, new investment, asset sales or an agreed standstill.
A company voluntary arrangement may allow a company to reach a binding compromise with its unsecured creditors. Only 14 CVAs were recorded in June 2026, and their use remains low compared with historical levels. However, low national usage does not determine whether a CVA is suitable for a particular company.
Administration may provide protection from creditor action while a restructuring or sale is pursued. A statutory moratorium may also be available in some circumstances, giving an eligible company a short period of protection while a rescue plan is developed.
The June statistics recorded eight moratoriums and two restructuring plans. These remain relatively uncommon procedures, but they demonstrate that the insolvency framework includes options intended to support company rescue as well as closure.
The appropriate route depends on whether the business remains commercially viable, the scale and nature of its debts, the position of secured creditors and the availability of funding.
Early action usually preserves a wider range of options. Delaying until a creditor presents a winding-up petition, the company’s bank account is restricted or essential suppliers withdraw support may make rescue more difficult.
Our business recovery team advises companies and directors on restructuring, creditor negotiations and formal insolvency options throughout England and Wales.
We can help directors assess the company’s position, understand their duties and determine whether the business can be stabilised or whether an orderly insolvency process is required.
