Company collapses in England and Wales fell last year, according to new official figures, but compulsory liquidations soared to a 10-year high and experts warned of more uncertainty for firms in the coming months.
Some 23,872 companies went out of business in 2024, the Insolvency Service said, down 5% on the previous year.
Despite the drop year on year, the number of insolvencies was far higher than most of the last decade, and remains at levels last seen during the 2008 financial crisis.
The figures also revealed that compulsory liquidations – where courts order firms to stop trading because they cannot pay their debts – jumped 14% to 3,230 in 2024 after a year-end surge.
The number of monthly compulsory liquidations soared by 53% year on year during December.
Administrations, an accounting process used when especially large companies hit the wall, also rose – up 2% over 2024 – and were 5% higher year on year in December.
David Hudson, restructuring advisory partner at business consultancy FRP, said it is “notable” that administrations have risen, adding: “These typically involve the largest firms and have the biggest impact in terms of jobs and supply chains.”
High-profile administrations in 2024 included Homebase, Carpetright and The Body Shop. All three were bought out of administration, but thousands of jobs were lost across the businesses.
Experts pointed to more uncertainty coming from measures introduced in the October Budget, after Chancellor Rachel Reeves raised national insurance contributions (NICs), a tax paid by companies.
The policy is designed to help fund improvements in public services such as the NHS, but it has been criticised by business groups for making it more expensive for firms to hire people.
Meanwhile, economic growth has been slow in recent months, with the most recent official figures showing the UK economy grew 0.1% in November after falling in the months before.
Mr Hudson said there are “reasons for optimism”, pointing to hopes that the Bank of England will cut interest rates again in the coming months.
But he added that, without an increase in demand, it will not be “enough to offset the headwinds buffeting most businesses”.
The month of December also saw a drop in companies going bust, with 1,838 insolvencies across the period – about 6% fewer than in November and 14% lower than the same month in 2023.
Company insolvencies in Scotland were similar to the year before, at 1,236, while Northern Ireland saw 305, a 40% increase from 2023.
Giuseppe Parla, business recovery director at Menzies consultancy, said: “While the December statistics paint a picture of economic stability, they will likely buck the trend.
“The new year is likely to bring in more of the same, with an increased cost of hiring and retaining staff, following the changes to employers’ NIC contributions leading many into financial difficulty.”
