Which UK Regions Experienced the Highest Business Insolvency Rates In 2024 and Why?

According to a recent study conducted by Helix Law, a firm of litigation specialists based in the South of England, business insolvencies surged across the UK in 2024, with thousands of companies pushed into collapse by rising costs, stubborn inflation and tighter borrowing conditions.

While all regions in the country have undoubtedly been feeling the pressure, new research shows that there are, in fact, clear geographical differences in how businesses are coping. Indeed, some areas are proving particularly vulnerable, with survival rates plummeting and insolvencies accelerating at an alarming rate.

The findings of this report reveal not only where businesses are failing but also why certain parts of the UK are bearing the brunt, and for business execs and founders alike, being aware of these things may be incredibly helpful in preventing the same thing from happening to them.

 

North West as the UK’s Insolvency Epicentre

 

The North West topped the table with an estimated 4,034 company insolvencies in 2024, giving it a Business Insolvencies Impact Score of 78.80. Its five-year survival rate sits at just 36.10%, one of the weakest in the UK, highlighting how tough it is for firms in the region to stay afloat.

This is a region where legacy industries like manufacturing still play a big role, and rising global supply chain costs have hit hard. Add to that a 23% growth in insolvencies since 2022, and you see the picture of a business ecosystem under immense strain. Companies in Greater Manchester, Liverpool and Lancashire are particularly exposed, with many buckling under the weight of higher energy bills and material costs.

The crux of the matter here is that business in the North West of the UK is tough, especially for those in industries like manufacturing that are specifically affected by the aforementioned supply chain cost increases.

 

 

Yorkshire and Humber: The Steepest Climb in Failures

 

Hot on the North West’s heels is Yorkshire and Humber which recorded 3,139 insolvencies in 2024 and the highest insolvency rate in the country at 165.07 per 10,000 businesses. What’s particularly striking, however, is the sheer pace of decline – indeed, insolvencies in the region have surged by more than 35% since 2022, highlighting a shockingly rapid downturn.

Although five-year survival rates here are slightly healthier at 41%, the sudden spike suggests that businesses are encountering fresh shocks – problems that they didn’t previously have to deal with. Consumer-facing sectors such as retail and hospitality, already fragile after the Covid-19 pandemic, are seeing confidence drain away as discretionary spending falls.

And for cities like Leeds and Sheffield, the squeeze on commercial property and local services has created a perfect storm of financial stress.

 

London and the West Midlands: Different Stories, Same Pressures

 

London may have more companies than anywhere else, but it wasn’t immune in 2024. Over 5,400 businesses failed in the capital, driven by high operating costs and a fiercely competitive environment. And, at the end of the day, the perception that the South East is insulated from national trends has been firmly disproven.

The West Midlands, meanwhile, posted 2,377 insolvencies. While the overall rate was lower than its northern counterparts, the region’s five-year survival rate of just 34.66% was the weakest in the top ten.

Longstanding structural challenges are at play here, especially in manufacturing hubs like Birmingham and Coventry, where automotive supply chains are struggling with international competition and cost hikes.

 

So, Why Are Businesses Struggling So Much?

 

Several factors converged in 2024 to create one of the toughest operating environments in recent memory. Inflation pushed up everything from wages to materials, energy costs refused to come down and higher interest rates made borrowing prohibitively expensive just as firms needed cashflow support. Corporation tax and business rates added further pressure, eroding already thin margins. All in all, a perfect storm, just in the worst way possible.

The result has been a toxic mix that few businesses could withstand, particularly smaller firms and those in sectors tied to consumer spending. According to Helix Law, this has also led to rising litigation, as companies and shareholders clash over broken agreements and unmet expectations.

 

What Does the Future Hold for Businesses in the UK?

 

Regional insolvency disparities highlight that while the UK economy faces nationwide pressures, local factors (from industrial mix to survival culture) certainly shape how those pressures play out – perhaps more than previously thought.

The North West and Yorkshire and Humber tell one story of high-density business activity meeting weak resilience, while the West Midlands shows what happens when deep-rooted structural issues meet external shocks.

For companies navigating these conditions, professional advice is more important than ever. Insolvency doesn’t just reflect financial failure – it often sparks disputes, litigation and knock-on impacts across supply chains. Getting ahead of these risks will be key to avoiding the worst outcomes as we move further into 2025.