January was bleak as insolvencies hit unwelcome peak

The number of company insolvencies rose 11 per cent year-on-year to 1,971 across England and Wales in January 2025, according to data from the Insolvency Service.

It was the highest level registered in January for more than five years.

This rise in corporate insolvencies is down to an increase in the number
of Creditors’ Voluntary Liquidations and administrations and showed that businesses were choosing to close following too many years of challenging trading conditions and before the rise in costs from the increase to employers’ national insurance contributions and to the national minimum wage in April.

In addition, the recent cut in the growth forecast has had an impact on business confidence and led to many directors becoming unsure about investment or business growth this year, as well as reducing willingness to invest in growing their workforces.

While the economic environment is one of instability and uncertainty, businesses should prepare themselves effectively and build resilience.

Whether it’s engaging with customers, aligning with staff, or negotiating with suppliers, creating a solid financial plan is essential for survival.

Working closely with accountants and finance professionals can help ensure businesses have a firm grip on their cashflow, understand where they can make savings, while looking ahead to growth opportunities.

In addition, speaking to insolvency practitioners might seem daunting, but at Simply Corporate we offer empathetic, practical solutions tailored to recovery.

Acting sooner increases the chances of overcoming financial difficulties and securing long-term stability.