UK insolvencies up ahead of Budget, but retail boosted by summer momentum

With the Autumn Budget looming, new insolvency figures from the Office for National Statistics (ONS) have revealed a year-on-year increase in insolvencies during October 2025, as companies continue to face significant economic uncertainty.

ONS figures showed that there were 2,029 registered company insolvencies in England and Wales during October 2025, up by 2 per cent from the previous month (1,995 in September 2025) and an increase of 17 per cent compared to 1,739 in October 2024.

During the month, there were 1,592 creditors’ voluntary liquidations (CVLs), 301 compulsory liquidations, 119 administrations and 17 company voluntary arrangements (CVAs).

From November 1 2024 to October 31 2025, one in 187 companies on the Companies House effective register (at a rate of 53.4 per 10,000 companies) entered insolvency, down from 53.9 per 10,000 companies in the 12 months to October 31 2024.

Jennifer Lockhart, partner and insolvency specialist at law firm Brabners, said that the year-on-year rise in insolvency figures showed the “significant uncertainty gripping businesses ahead of next week’s Autumn Budget.”

According to Lockhart, many UK businesses have adopted “a 'wait and see' approach to investment and expansion plans” amid speculation over potential measures in the budget, a situation that has been exacerbated by September’s unexpected contraction in economic growth.

She continued: "This hesitation is particularly acute among SMEs and consumer-facing businesses who are already navigating elevated operating costs and fragile consumer confidence. The combination of stalled growth and policy uncertainty is creating a perfect storm for those already operating on tight margins.”

Lockhart asserts that UK businesses need “clarity and stability”, with the budget representing “a critical moment, not just for immediate financial planning but for confidence across the wider economy.”

“Without reassurance on tax policy and support for growth,” she added, “we can expect to see more firms struggling to maintain momentum through the winter months."

One sector that has been especially badly affected by high insolvencies and financial distress over recent years has been the retail industry. However, statistics for September 2025 have shown reasons for optimism in the beleaguered sector. Despite retail insolvencies increasing 13 per cent year-on-year from 139 in September 2024 to 157 in September 2025, this was down 8 per cent from 171 in August 2025.

Gordon Thomson, restructuring partner at audit, tax and consulting firm RSM UK, said that this demonstrates that “summer sales momentum continued into September”, but acknowledged that the year-on-year increase was concerning.

Thomson stated that the major risk for retailers was that budget uncertainty could further restrict consumer spending during the all-important festive period. He added that additional tax burdens, on top of rising costs and inflation, also presented a major risk for retailers’ already depleted cash reserves, potentially pushing more fragile operators into insolvency.

Thomson called for “targeted relief or investment incentives”, which he said “could provide a much-needed lifeline for retailers to support a consumer-led recovery that could, in turn, help to boost the wider economy.”

Echoing comments made by Jennifer Lockhart, Thomson said that many retailers were taking a “wait and see” approach ahead of the budget, but warned that this also posed challenges, with businesses needing to “act now" to preserve cash flow, manage costs and protect the customer experience.

Despite the sector's struggles, the UK high street could still represent a major M&A opportunity for buyers committed to physical retail

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