Top Service News
UK Insolvency Numbers Edge Down in March—But Construction Remains Under Pressure
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March 2025 saw a slight dip in company insolvencies across England and Wales, but the numbers remain worryingly high—and construction continues to bear the brunt.
According to the latest government data, there were 1,992 registered company insolvencies in March 2025, down 2% from February’s 2,032, but still 9% higher than March 2024. Although we’re no longer at the historic highs of 2023, the current levels are a far cry from stability. These figures serve as a reminder: volatility is far from behind us, particularly for industries already stretched thin by rising costs, delayed projects, and prolonged payment cycles.
Construction: Still Leading the Pack—for All the Wrong Reasons
Once again, the construction industry recorded the highest number of insolvencies in the 12 months leading to February 2025—4,046 cases, accounting for 17% of all company insolvencies where the industry was known. This marks construction as the most affected sector, continuing a trend that has persisted over the past two years.
Why is construction struggling? The sector faces a perfect storm: persistently tight margins, increasing materials and labour costs, long-standing late payment issues, and the ongoing impact of high interest rates on project financing and property development. Add to that the increased risk aversion from lenders and clients, and it’s easy to see why many firms are reaching breaking point.
At Top Service, we’ve seen firsthand how even well-run construction businesses are being caught in the crossfire—especially subcontractors and SMEs who often operate with limited cash buffers.
Breaking Down the Numbers
- Creditors’ Voluntary Liquidations (CVLs) continued to dominate, making up 77% of all insolvencies in March. These rose slightly—up 1% from February and 8% year-on-year—suggesting that many companies are choosing to wind up before cash flow pressures become fatal.
- Compulsory liquidations dropped 24% from their 10-year high in February but still remained higher than both the March 2024 level and the 2024 monthly average.
- Administrations rose by 17% month-on-month and 30% year-on-year, hinting at an uptick in attempts to restructure or sell businesses before total collapse.
- While low in volume, Company Voluntary Arrangements (CVAs) surged by 143% from February and were 89% higher than in March 2024, indicating renewed interest in alternative turnaround options.
- The rolling 12-month insolvency rate now stands at 53.1 per 10,000 companies, or 1 in every 188 companies—down from 55.8 the previous year but still elevated by historic standards.
It’s worth noting that although total insolvencies over the last year are slightly down from 2023’s 30-year high, they remain significantly above pre-pandemic levels.
Long-Term Picture: Risk Hasn’t Gone Away
While the headline rate may suggest slight easing, the underlying conditions remain tough. The construction sector, in particular, is still walking a tightrope. Even as insolvency rates per capita remain below 2008-09 levels (thanks to a larger register of active companies), the pressure on businesses is intense.
Government support during the pandemic helped stem the tide—but we are now seeing the delayed impact of debt burdens and inflationary costs. The question for the months ahead is whether these insolvency levels represent a new normal, or if we’re heading for further structural adjustment.
Our View
We’re urging construction businesses to stay proactive—tighten credit control, renegotiate payment terms where possible, and be wary of overtrading. Even modest drops in insolvency numbers shouldn’t be mistaken for a sign of stability. The data paints a clear picture: this is a sector still deep in the fight for resilience.
If you’d like to speak with us about how to protect your business or a client’s in these conditions, reach out. We’re here to help you navigate the risk and stay ahead of the curve.