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Pub insolvencies on rise as cost pressures take toll

June alone saw 84 pubs become insolvent – the highest monthly total in over a decade. The rise in insolvencies follows April’s increase in employer National Insurance Contributions (NICs) and the National Living Wage.

Further analysis showed that 4,742 of UK pubs are both technically insolvent (negative net assets) and rated ‘maximum risk’ on the Delphi credit score – this figure represents approximately 1-in-8 British pubs.

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Price Bailey explained the seriousness of the situation for these venues, detailing that “these businesses are highly vulnerable to cash flow insolvency and face significant barriers to accessing finance without personal guarantees. Many are likely to face winding-up petitions or dissolution notices within the next 12 months”.

Matt Howard, head of the insolvency and recovery team at Price Bailey, expanded: “The April tax and wage hikes were expected to have a delayed impact, but the insolvency data shows a sharp and immediate effect. Many pubs had already exhausted their financial buffers and simply couldn’t absorb the additional costs.

“We’re seeing a sustained rise in insolvencies through Q2 and Q3, not just a one-off spike. The combination of rising payroll costs, energy prices, and inflation is proving fatal for pubs operating on thin margins.

“It’s not just pubs feeling the pinch – consumers are too. Tax rises are eroding disposable income, leaving households with less to spend on leisure. That’s a double hit for pubs: rising costs on one side and falling footfall on the other.”

Additionally, as legacy pub chains and independents face closures, even the previously strong expansion rate seen amongst branded pubs owned by craft breweries, as well as themed venues, is slowing.

• On-Trade
• pubs
• Business
• closures
• money
• costs
• Insolvencies
• NICs