Key Takeaway: Voluntary liquidations reached record levels between 2021 and 2023 and UK insolvencies stayed high through 2024. In 2025, the businesses that stay resilient are the ones that understand their numbers in real time and react early. Quadient finance automation helps you keep cash moving, spot risks sooner and stay in control, so you are less likely to become the next liquidation statistic.
According to recent research by Quadient, UK businesses are now three times more likely to enter voluntary liquidation than ever before. Based on a Freedom of Information (FOI) request to The Insolvency Service, the data reveals a twelve-fold increase in voluntary liquidations during 2021. This figure underscores the unprecedented challenges faced by companies across the country.
Voluntary Liquidations on the Rise
The FOI request explored UK insolvency data from 1960 to 2023 and revealed a dramatic shift in the proportion of voluntary versus compulsory liquidations. Until 2012, the ratio remained steady at 2:1, meaning there was one compulsory liquidation for every two voluntary liquidations. However, the ratio has surged, reaching 7:1 in 2023 and an astounding 25:1 in 2021. The recent numbers reflect the highest levels of voluntary liquidation recorded this century, with one in every 272 UK businesses closing voluntarily in 2023.
These figures highlight a growing trend: businesses are choosing to close on their terms rather than being forced into insolvency by the courts. While this may suggest that companies are exercising control over their fate, many of these liquidations result from external pressures that have made it increasingly difficult for businesses to remain viable.
New Insolvency Service data shows that the pressure has not eased. In 2024 there were 23,872 registered company insolvencies in England and Wales, including 18,840 creditors’ voluntary liquidations. That is roughly one in 191 companies entering insolvency in a single year, keeping voluntary liquidation rates near record highs.
As we move through 2025, these figures are a clear warning sign for UK businesses that are still trading in a tough economic climate.
Economic Pressures Behind the Trend
The shift toward voluntary liquidations can be traced back to more than a decade of economic instability, including austerity measures, the COVID-19 pandemic, financial crises, and global conflicts. These events have strained businesses across industries, leading many to shut down to retain control over their assets voluntarily.
"There is no hard-and-fast rule on when a business enters voluntary liquidation," Joey Glazer, SME Director from Quadient, explained. "These statistics cover a broad spectrum of companies, from long-established businesses to short-term ventures. The common thread, however, is that many of these liquidations are driven by factors beyond the business owner's control."
In addition to global challenges, the UK has seen a steady increase in total insolvencies, rising from 1,563 in 1960 to 25,158 in 2023. Notable spikes occurred during the early 1990s recession, as well as in 2022 and 2023, likely fueled by ongoing inflation, supply chain disruptions, and the escalating cost-of-living crisis.
Financial Resilience Through Automation
To combat these external pressures, Quadient advocates for businesses to strengthen their financial resilience by leveraging automation and AI-driven solutions. By automating financial processes, companies can ensure faster payment collection, gain real-time visibility into their cash flow, and minimise the time and resources spent on manual tasks.
"Business leaders need to take control of their finances, so they have the flexibility to deal with the unexpected," said Joey. "Automating financial operations is crucial in reducing inefficiencies and ensuring that companies can maintain an accurate and up-to-date view of their financial health."
Automation tools give businesses a clear picture of their current financial status and enable them to forecast and prepare for future challenges. This proactive approach helps companies avoid becoming another statistic in the rising tide of voluntary liquidations.
A Path Forward
As the economic climate challenges UK businesses, financial preparedness will be more critical than ever. Quadient encourages companies to invest in automated financial systems that offer the agility and insights to navigate uncertain times.
By optimising their finance functions with advanced technology, businesses can act confidently, ensuring they remain resilient in the face of external pressures. As more companies recognise the need to adapt, tools like Quadient's automation solutions will be vital in helping them thrive in an increasingly complex landscape.
To better understand the rising voluntary liquidation trend, check out the detailed infographic from Quadient. It highlights key insights from 1960 to 2023, showing how economic pressures have impacted UK businesses. Visit this page to view the full infographic and explore how companies adapt to these challenges.
For more information on how Quadient’s accounts payable automation tools can help your business stay resilient, visit https://www.quadient.com/en-gb/ap-automation
Frequently Asked Questions
Why are so many UK businesses choosing voluntary liquidation?
Quadient’s FOI research into data from 1960 to 2023 shows that the ratio of voluntary to compulsory liquidations has jumped from around 2:1 before 2012 to 7:1 in 2023, peaking at more than 25:1 in 2021. Many owners are choosing to close on their own terms rather than wait for creditors to force the issue, often because external pressures have made trading unsustainable. Quadient+2
How serious is the situation in 2024 and 2025?
In 2024 alone, there were almost 24,000 company insolvencies in England and Wales, including nearly 19,000 creditors’ voluntary liquidations. That works out at roughly one in 191 companies entering insolvency. As we move through 2025, this keeps voluntary liquidation on the radar for many business leaders. Credit Connect+3The Gazette+3
What are the main pressures pushing businesses toward liquidation?
The blog highlights more than a decade of economic strain, from austerity and financial crises to COVID-19, global conflicts, inflation and the cost-of-living crisis. These factors raise costs, squeeze demand and make it harder for businesses to absorb shocks, so even viable companies can end up considering voluntary liquidation.
How can finance automation help reduce the risk of needing voluntary liquidation in 2025?
Finance automation tools from Quadient help you get paid faster, keep a real-time view of cash flow and reduce time lost to manual tasks. Automating accounts payable and receivable gives you earlier warning signs when things are going off track and more levers to pull before insolvency becomes the only option. Quadient+2
What makes Quadient’s automation solutions stand out in 2025?
Quadient AP and AR are built to give finance teams visibility and control that is hard to get with older tools. Quadient AP is trusted by more than 2,100 finance teams, processes over 31 billion dollars in AP spend, and is rated 4.6 stars on G2 with 79 percent 5-star reviews. Quadient AR is rated 4.3 stars on G2, with 93 percent of reviews at 4 or 5 stars. Quadient+4Quadient+4
Quadient+How can I explore Quadient solutions for free in 2025?
You can start by booking a free demo of Quadient AP or AR to see key features in action.