Nearly 2,000 businesses in England and Wales entered insolvency in August, according to new figures released by the Insolvency Service on Friday. A total of 1,946 firms went into insolvency, a figure that remained flat compared to July but was down from 2,007 in August 2025.
The data indicates a rise in compulsory liquidations, up 8% month-on-month and 5% year-on-year, as creditors and HMRC pursue debts. Administrations saw a significant jump, increasing by 44% from July and 60% from August 2025. This surge was largely attributed to the collapse of more than 250 real estate companies.
Benjamin Wiles, managing director of restructuring at Kroll, described the situation as “challenging,” noting “early signs of distress” among building materials businesses. Blair Milne, partner at Azets, referred to August as a “summer of sorrow,” highlighting insolvencies in the real estate sector and among some hospitality brands.
Giuseppe Parla, restructuring and insolvency director at Menzies, warned that more insolvencies could occur in the hospitality sector due to rising costs, including increases to business rates, national insurance, and the national minimum wage. The sector also faces uncertainty from a recently announced tourist tax and ongoing discussions about bans on ‘vertical drinking’.