The UK economy has seen a mixed start to 2025. While the number of companies entering insolvency for the first quarter of the year was lower than in 2025, the number spiked dramatically in March, hitting the highest level for the month since 2017.
With inflation having fallen from its historic highs over the last 12 months, and relative certainty over the UK political scene having been delivered by the general election, the start of 2025 saw businesses cautiously optimistic. But a tumultuous start to the year means that this did not last for long.
Reflecting this, the latest figures from Kroll suggest that administrations spiked toward the end of the first quarter. March 2025 saw a record level of administrations since Kroll’s records began in 2017.
Benjamin Wiles, head of UK restructuring, Kroll, commented, “March’s record number of company administrations reflects distress in the market. There are mounting pressures on all businesses – from the costs brought in with the Autumn Budget to those posed by the uncertainty of global tariffs.
Administrations are a formal insolvency process designed to rescue businesses and maximise returns for creditors. Administrations are typically utilised for larger companies where a restructure is needed to save parts or all the business. These tend to be a better barometer on the health of the economy, whereas company liquidations represent smaller businesses with very few assets and debts.
Kroll is a leading independent provider of global financial and risk advisory solutions. It has been maintaining insights on UK wide company administrations for eight years now – and according to the researchers, the number rose dramatically year on year – from 108 in March 2024, to 141 in March 2025.
That might come as a surprise, considering the number of administrations in the whole first quarter was down from the same period in the previous year. In particular, amid the 262 administrations in 2025, there were large falls in the number in the manufacturing sector (from 56 to 37) and media and technology (39 to 26).
While this trend was continued through March 2025, however, it was counterbalanced by large spikes in healthcare administrations (from two to eight, year on year), industrials (five to nine), and real estate (10 to 18). With the shock waves of the US’ new, aggressive tariff regime, and rising Employer National Insurance Contributions, there are now greater cost pressures on businesses who traditionally operate on small margins in those sectors.
Wiles added, “Our research shows that a lot of planning is already being undertaken by larger businesses who are tackling potential challenges through restructuring, whereas for small businesses who don’t have access to the same expertise and liquidity, it’s a massive challenge.”