UK Business Insolvencies Forecast to Fall 4% in 2026 but Stay 21% Above Pre-Pandemic Levels, Allianz Trade Says
Allianz Trade forecasts UK business insolvencies will fall 4% to about 25,600 in 2026 and 3% to about 24,800 in 2027, still 21% above pre-pandemic averages. It estimates 213,000 UK jobs are at risk.
By Entrepreneur Group · Published
UK business insolvencies have passed their peak but will stay high, according to a forecast from trade credit insurer Allianz Trade published on 27 October 2026. It expects insolvencies to fall 4% to about 25,600 in 2026 and a further 3% to about 24,800 in 2027. Even then, 2027 would be 21% above the pre-pandemic average.
Allianz Trade describes the outlook as "stabilisation, not recovery". It estimates that 213,000 UK jobs are directly at risk from business insolvencies across 2026 and 2027.
The UK forecast
Allianz Trade's UK outlook sets out the main numbers:
- 2026: about 25,600 business insolvencies, down 4%, reversing the rise seen since 2021.
- 2027: about 24,800, down a further 3%.
- Compared with before the pandemic: 2027 levels would still be 21% above the pre-pandemic average.
- Jobs at risk: 213,000 across the two years. Allianz Trade names the UK, France and Germany as leading Europe's figures for jobs at risk.
It links the continuing pressure to tighter financing conditions and higher borrowing costs, weak growth and subdued demand, squeezed margins, and the lasting effects of Brexit, the pandemic and the inflation shock.
Sectors under most pressure
Allianz Trade says four sectors make the largest contribution to UK insolvencies and will remain under pressure:
- Construction: financing pressures and wider challenges in the sector.
- Real estate: exposed to higher borrowing costs and weaker investment.
- Trade and retail: balancing persistent cost pressures against cautious spending by consumers and businesses.
- Hospitality and accommodation: margin pressure from higher operating costs, although trading has improved in parts of the market.
Insurance Business, reporting on the forecast, notes that construction has made up about 17% of insolvencies in Insolvency Service figures through mid-2026, with wholesale and retail trade at 15% to 16%.
The global picture is worse
The UK is doing better than the world as a whole. Allianz Trade forecasts global insolvencies will rise 5% in 2026 and 1% in 2027, the fifth year of increases in a row, and now expects the peak to come in 2028. It estimates about 2.7 million jobs are directly at risk worldwide across 2026 and 2027, around 60% of them in Europe.
Allianz Trade chief executive Aylin Somersan Coqui said "much higher-than-expected interest rates are ramping up the pressure on already fragile companies". The report also points to the growing number of young companies, noting that the stock of active companies rose about 10% between 2021 and 2025.
How this fits with official figures
The forecast is consistent with the trend in official data. The Insolvency Service recorded 1,882 company insolvencies in England and Wales in September 2026, 5% fewer than a year earlier, as we reported in our coverage of company insolvencies in September 2026. Allianz Trade's annual forecast covers the UK as a whole, while the monthly Insolvency Service figure covers England and Wales only, so the two numbers are not directly comparable.
What it means for founders
This section is editorial guidance, not financial advice. A slow fall in insolvencies still leaves a high number of businesses failing, so the risk of a customer or supplier going under remains real, especially in construction, retail and hospitality.
- Check who you are exposed to. List your largest customers and run credit checks on any that owe you a significant sum.
- Tighten payment terms where you can. Shorter terms, deposits or staged payments reduce what you lose if a customer fails.
- Have a back-up supplier. If you rely on one supplier in a pressured sector, line up an alternative now.
Frequently asked questions
How many UK businesses will go insolvent in 2026?
Allianz Trade forecasts about 25,600 UK business insolvencies in 2026, a fall of 4%, followed by about 24,800 in 2027.
Are UK business insolvencies falling?
Allianz Trade expects them to fall in 2026 and 2027, but to stay 21% above the pre-pandemic average in 2027. Official figures showed 1,882 company insolvencies in England and Wales in September 2026, 5% fewer than a year earlier.
Which sectors have the most insolvencies in the UK?
Allianz Trade names construction, real estate, trade and retail, and hospitality and accommodation as the largest contributors to UK insolvencies.
Sources
- Allianz Trade: Insolvency report, October 2026 (27 October 2026) (reviewed 2 November 2026)
- Allianz Trade: UK business insolvency outlook 2026, stabilisation not recovery (27 October 2026) (reviewed 2 November 2026)
- Insurance Business: Insolvency peak passes for UK businesses, but structural pressure remains (27 October 2026) (reviewed 2 November 2026)
- Insolvency Service: Company insolvencies, September 2026 (20 October 2026) (reviewed 2 November 2026)