December 2025: Insolvencies Ease But Construction Risk Remains High

Published on 22^nd January 2026

The latest insolvency figures are in, and while headline numbers dipped at the end of 2025, risk in the construction supply chain remains very real.

In December 2025, 1,671 companies across England and Wales became insolvent:

• 10% lower than November 2025
  
• 13% lower than December 2024
  

While this monthly fall is welcome, it mirrors normal volatility rather than a meaningful recovery. Insolvency levels remain elevated by historical standards, particularly for voluntary closures.

What the Numbers Show

December 2025 insolvencies included:

• Creditors’ Voluntary Liquidations (CVLs): 78% of all cases
  
• Compulsory liquidations: down 4% on November
  
• Administrations: down 21% month-on-month
  
• Company Voluntary Arrangements (CVAs): low and declining
  
• Receiverships: none recorded
  

CVLs continue to dominate, underlining a clear trend: more businesses are choosing to shut down voluntarily, often after prolonged cashflow pressure and mounting debt.

Construction: Still Under Pressure

Although December saw a short-term dip overall, the past four years have recorded the highest CVL volumes since records began in 1960.

For construction, this matters.

Voluntary liquidations are particularly damaging for suppliers and subcontractors:

• Less warning
  
• Limited recovery prospects
  
• Outstanding balances are often written off entirely
  

Even when demand exists, tight margins, rising costs, and delayed payments continue to push construction firms toward closure rather than recovery.

What’s Driving the Trend?

Despite the December slowdown:

• Compulsory liquidations in 2025 were at their highest level since 2012
  
• Administrations fell overall in 2025, suggesting fewer companies are able, or willing to restructure
  
• CVLs in 2025 were 10% lower than the 2023 record high, but still historically elevated
  

This points to a market where businesses are running out of road, not just experiencing temporary pressure.

Insolvencies by Industry: Construction Remains the Most Exposed

The number of insolvencies in the 12 months to November 2025 was:

• Construction
  • 3,950 insolvencies
  • 17% of all cases with industry recorded
  • The highest of any sector, reflecting sustained pressure from tight margins, rising costs, and ongoing cashflow disruption
    
• Wholesale & Retail
  • 3,773 insolvencies (16%)
    
• Accommodation & Food Services
  • 3,372 insolvencies (14%)
    
• Administrative & Support Services
  • 2,451 insolvencies (10%)
    
• Professional, Scientific & Technical
  • 1,983 insolvencies (8%)
    
• Manufacturing
  • 1,970 insolvencies (8%)
    

Key takeaway:
Construction continues to lead all sectors by insolvency volume, underlining the need for early action, tighter credit control, and real-time construction-specific risk intelligence.

Our Take – What This Means for You

At Top Service Ltd, we look beyond headline statistics.

As the UK’s only credit reference agency dedicated solely to the construction industry, we use real-time, construction-specific trading data shared by our members to identify distress months – often over a year – before insolvency occurs.

What we consistently see:

• Payment delays are creeping in, long before failure
  
• Sudden changes in payment behaviour
  

In the current environment, late payment is no longer just a nuisance; it’s often the first sign of collapse.

This isn’t the time to rely on outdated credit reports or annual accounts. It’s the time to act on live intelligence from inside the industry.

What Should You Do Now?

• Review and tighten payment terms where needed
  
• Monitor customer behaviour: missed payments, CCJs, director changes
  
• Use live credit alerts, not static reports
  
• Act early on overdue debt
  
• Speak to specialists who understand construction risk
  

Still Trading in a High-Risk Sector? Stay Protected.

Insolvency numbers may fluctuate month to month, but construction remains one of the most exposed sectors in the UK economy.

At Top Service Ltd, we help construction businesses:

• Minimise debt exposure
  
• Make confident credit decisions
  
• Get paid faster
  
• Stay one step ahead of insolvency risk
  

Let’s talk. With the right tools and real-time, industry-specific data, you can trade safely, without the surprises.

Stay ahead. Minimise risk. Maximise cash.

We’re here to help – whether it’s insight, tools, or recovery.

Call us on 01527 503990 or visit top-service.co.uk