Pub Insolvencies Surge to Decade High as Tax and Wage Hikes Bite
Pub insolvencies have surged to their highest levels in more than a decade, with new data revealing the devastating impact of April’s tax and wage increases on the sector.
According to analysis by accountancy firm Price Bailey, 219 pubs entered insolvency during Q2 2025, followed by 189 in Q3, representing a sharp reversal of the tentative recovery observed earlier in the year. The first quarter had seen 161 establishments unable to pay their debts, meaning 569 pubs have entered insolvency in the first nine months of 2025 alone.
June proved particularly catastrophic, with 84 pub insolvencies recorded – the highest monthly total in over a decade. The spike came just two months after the government implemented significant increases to employer costs through changes to National Insurance Contributions and the National Living Wage.
More alarming than the immediate insolvency figures is Price Bailey’s broader analysis of sector vulnerability. The firm examined credit risk scores across all UK pubs and found that 4,742 establishments are both technically insolvent (carrying negative net assets) and rated ‘maximum risk’ on the Delphi credit scale.
Price Bailey explained the gravity of the situation operators are facing, 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.”
The scale of the crisis has proved so severe that even innovative market entrants are struggling. While themed pubs, experiential venues, and establishments owned by craft breweries had previously shown strong expansion, Price Bailey reports that even these formats are now experiencing site closures and operational pauses.