Insolvencies Hold Steady in August: August 2026 Update

Published on 22^nd September 2026

Construction remains the UK’s most affected sector as company failures in England and Wales shift just 1% month-on-month.

Overview

Registered company insolvencies in England and Wales held virtually flat in August 2026. This brings a moment of stabilisation following the slight uptick we saw in July.

The Insolvency Service recorded 1,946 registered company insolvencies in England and Wales during August. This figure is almost identical to July 2026 (1,934). However, it sits 3% lower than the same month last year (2,007 in August 2025).

While a 1% monthly shift shows a calm surface, underlying market pressures remain active. Over the last 12 months, construction accounted for 3,866 insolvencies, remaining the single hardest-hit sector in the country. For construction businesses, keeping a close eye on supply chain stability is as vital as ever.

(Note: You can view the full dataset on the official Insolvency Service page).

Headline figures at a glance

• Total Insolvencies: The department recorded 1,946 company insolvencies across England and Wales in August 2026.
• Month-on-Month Change: Figures shifted by just 1% compared to July 2026 (1,934).
• Year-on-Year Change: Figures dropped by 3% compared to August 2025 (2,007).
• Top Impacted Sector: Construction remains the most vulnerable industry. It recorded 3,866 failures over the last 12 months, representing 17% of all captured cases.

Construction: ongoing pressure beneath the headlines

While overall business failure numbers held flat, the construction sector continues to top the national list for insolvencies. Construction accounted for 17% of all UK company insolvencies in the 12 months leading up to August 2026.

Firms operating across complex supply chains continue to navigate familiar challenges:

• Elevated materials costs and high everyday operating overheads.
• High interest rates that add friction to project funding and developer commitments.
• Protracted payment delays from clients 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 contractor experiences financial distress, that strain quickly dominoes down the line, exposing subcontractors to sudden bad debt.

What’s driving the August numbers?

A closer look at the breakdown shows significant movement behind August’s flat headline total:

• Administration Spike: Administrations jumped by 44% compared to July (and 60% compared to August 2025). This surge was heavily driven by a recurring wave of over 250 connected real estate companies entering administration.
• Compulsory Actions Up: Compulsory liquidations rose 8% month-on-month to 314 cases. They sit 5% higher than August 2025, showing that creditors are actively enforcing unpaid debts.
• Voluntary Closures Eased: Creditors’ Voluntary Liquidations (CVLs) dropped 4% month-on-month to 1,431 cases. Despite the dip, CVLs still made up 74% of all insolvencies in August.

A longer-term view

Over the 12 months ending 31 August 2026, the rolling insolvency rate stood at 50.1 per 10,000 active companies. This corresponds to roughly one in 200 registered companies entering insolvency. This rate represents a minor decrease from the 52.5 per 10,000 recorded in the previous 12-month period.

Insolvency rates remain much lower than the peak of 113.1 per 10,000 seen during the 2008–09 recession. This is because the total number of registered companies in the UK has more than doubled since then. However, overall volumes stay plateaued at a high level, meaning credit managers cannot afford to relax their risk checks.

What this means for construction businesses

The August data shows a steady headline surface, but subsector risks remain actively present. In an environment where bad debt can travel fast, 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

August’s flat headline figures offer a moment of stability, but the 44% jump in administrations shows that structural pressure is still working through corporate networks. From what we see on the ground day-to-day, trading conditions in the construction sector remain highly demanding.

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.