UK businesses face elevated insolvency risk in 2026
Allianz Trade forecasts approximately 26,550 UK company insolvencies in 2026, a slight decrease but still significantly above pre-pandemic levels, risking a domino effect through supply chains.
UK businesses are subject to prolonged insolvency risks in 2026, with an estimated 26,550 companies expected to become insolvent. This figure, while a slight decrease from recent peaks, remains about 30% higher than pre-2020 levels, according to Allianz Trade's latest report.
The interconnected nature of supply chains means that the failure of one business can trigger a chain reaction of financial distress among its partners. High input costs, rising wages, and elevated interest rates continue to pressure company margins and limit access to finance, exacerbating this risk.
While some sectors are showing signs of improvement, others, such as manufacturing, wholesale, and B2B services, are experiencing rising insolvencies. Sectors like construction, retail, and hospitality continue to operate with high levels of financial distress.
Allianz Trade highlights that trade credit insurance can offer protection against cash flow disruption and insured losses resulting from customer non-payment. This can help businesses trade with greater confidence amidst the ongoing economic uncertainties.