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Insolvencies Tick Upward in July: July 2026 Update
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Construction remains the UK’s most affected sector as registered company insolvencies in England and Wales rise 5% month-on-month.
Overview
Registered company insolvencies in England and Wales ticked upward in July 2026, breaking the plateau we saw in June.
The Insolvency Service recorded 1,931 registered company insolvencies in England and Wales during July. This figure represents a 5% increase compared to June 2026 (1,847). However, it sits 5% lower than the same month last year (2,031 in July 2025).
While July’s 5% rise is lower than the typical 8% monthly fluctuation seen over the last three years, trading conditions remain demanding. Construction sector insolvencies rose to 343 cases in July, keeping it firmly as the hardest-hit industry in the country. For construction businesses, keeping a close watch on supply chain risk remains critical.
(Note: You can view the full dataset on the official Insolvency Service page).
Headline figures at a glance
- Total Insolvencies: The department recorded 1,931 company insolvencies across England and Wales in July 2026.
- Month-on-Month Change: Figures rose by 5% compared to June 2026 (1,847).
- Year-on-Year Change: Figures dropped by 5% compared to July 2025 (2,031).
- Top Impacted Sector: Construction remains the most vulnerable industry. It saw 343 failures in July alone, accounting for 17% of all captured cases over the last 12 months.
Construction: ongoing pressure beneath the headlines
While overall business insolvencies rose modestly, the construction sector continues to experience severe financial strain. Insolvencies in the construction industry rose by 3% month-on-month to 343 cases in July.
Firms operating across complex supply chains continue to grapple with persistent challenges:
- Elevated financing and transport costs that erode tight profit margins.
- Delayed investment decisions and planning hurdles that make converting project pipelines into cash difficult.
- Ongoing payment delays from clients who are managing their own liquidity issues.
Construction relies on a heavily interconnected network of developers, main contractors, and trade specialists. For this reason, cash flow remains the biggest operational risk. When a client or main contractor experiences financial stress, that strain quickly dominoes down the line, exposing subcontractors to sudden bad debt.
What’s driving the July numbers?
A closer look at the breakdown shows where the pressure points were in July:
- Rise in Creditors’ Voluntary Liquidations (CVLs): CVLs jumped by 9% compared to June, totaling 1,497 cases. CVLs accounted for 78% of all corporate failures in July, showing that many directors are voluntarily choosing to close struggling businesses.
- Compulsory Actions Ticked Up: Compulsory liquidations rose 4% month-on-month to 288 cases, indicating that creditors continue to push winding-up petitions for unpaid debts.
- Administrations Dropped Sharply: Administrations fell by 33% to 124 cases. This decrease follows June’s figures, which were artificially inflated by a single cluster of approximately 60 connected real estate companies entering administration.
A longer-term view
Over the 12 months ending 31 July 2026, the rolling insolvency rate stood at 50.3 per 10,000 active companies. This corresponds to roughly one in 199 registered companies entering insolvency. This rate represents a minor decrease from the 52.5 per 10,000 recorded in the previous 12-month period.
While the long-term rate is showing gradual signs of stabilization, total volumes remain high by historical standards. With broader economic uncertainty still weighing on project delivery, credit managers cannot afford to relax their risk management standards.
What this means for construction businesses
The July data confirms that sector risk remains firmly present. In an environment where firms struggle to convert project pipelines into actual cash, a proactive approach to credit control is essential:
- Tighten your customer checks: Do not rely on past relationships. Check real-time credit positions before starting new project phases, not just at contract signing.
- Watch how fast you’re getting paid: A sudden slowdown in invoice payments is almost always the very first warning sign of client cash flow issues.
- Act early on overdue invoices: Be decisive with your credit control. This prevents a client’s payment delay from putting your own working capital at risk.
- Spread your risk: Review your projects and clients. Ensure your business isn’t overly dependent on one major contract for its core revenue.
- Keep communication open: Talk to your clients regularly. If you do this, you can spot and sort out potential payment roadblocks early.
Our view
July’s 5% increase in insolvencies shows that economic pressures are still actively testing business resilience across England and Wales. From what we see on the ground day-to-day, construction firms are dealing with a delivery challenge rather than a lack of work.
Firms are managing to protect their margins if they maintain strong visibility over their cash flow. Robust credit management and proactive debt recovery aren’t just administrative tasks right now. They are essential tools to protect your cash, maintain resilience, and keep your projects moving forward safely.
How can we help
Are you starting to notice delays in customer payments? Do you want to check your current credit risk exposure? Our specialist construction credit and debt recovery team is here to support you.
We use live credit insights and practical, straightforward recovery strategies. As a result, we help you stay in control of your ledger, protect your business against third-party failures, and make commercial decisions with absolute confidence.
