UK Insolvency Statistics

On average, a company has a half percent chance of going into administration in any 12 month period. This average is misleadingly low because a very high proportion of companies are very young (young companies are unlikely to be insolvent in their first few months of existence). It is worth researching the age of the company you are dealing with because the insolvency rate changes significantly with age as can be seen in the adjoining chart.
Companies less than a year old are the least likely to go into administration within the next 6 months. This is not surprising as most start-ups have enough cash to last 18 months. However, the risk of going into administration shoots up during the first few months since the inception of the company reaching a first peak of 0.8% at 21 months. The companies that survive this first 21 month hurdle gain a reprieve as the administration rate drops to 0.55%, but only briefly as the rate starts to climb up again reaching a peak of just under 1% when companies reach 9 years of age.

For the 54 thousand actively trading restaurants that are registered on Companies house there are 4 hurdles in a typical industry life-cycle. The first hurdle is at the 2 year mark where 3.75% of restaurants find themselves in non-voluntary administration. Once passed that hurdle the rate drops to 2.5% but only for 2 years when it shoots back up to a peak of 4% for restaurants that are about 5 years old. Thereafter the survivors face better prospects and the administration rate steadily declines to 1.8% for restaurants that are 15 years old. Presumably these restaurants now have an established clientele and they are getting better at managing their operations. However, after 15 years the restaurants seem to be going out of fashion or are facing new challenges as the administration rate climbs back up to nearly 4% again by the age of 21 years. Thereafter the survivors enjoy another 10 years of improving administration rates before reaching the fourth hurdle where the administration rate peaks for restaurants that are 37 years of age. Amazingly, based on Companies Data, out of 246 restaurants over 40 years old not a single one is in administration (at the time of writing); it seems that for restaurants older than 40 years old, age is an asset.

Analysis of the 23,000 actively trading pubs registered at companies house shows that the administration life curve for pubs and clubs is similar to restaurants but with only 2 hurdles. The first administrations peak is at about 3.7% and takes place between 3 and 5 years of age. The rate subsequently rapidly declines to about 1.5% years till pubs reach an age of 20 years. Thereafter the rate climbs upwards over the next 40 years to 4% by the time they are 60 years old and then accelerates to close to 9% by the time they are 80 years old. Similarly to restaurants, above a certain age (80 years in the case of pubs), pubs do not seem to go bust.

For the 791 newspaper publishers registered on Companies House, the trend is clear: the older the company the more likely it will be in administration. Younger publishers fare reasonably well, with fewer than 2% of newspaper companies that are less than 14 years old going into administration in any 12 month period. However, for older publishers the picture is bleaker: the administration rate steadily climbs up to a peak of 38% for publishers that are over 80 years old.

PLCs are more likely to survive the first two years of their existence than Private limited companies, however, thereafter they become significantly more likely to go into administration.