Key facts
- UK financial services bankruptcies rose to 49 in the first half of 2026, a significant increase from 30 in the same period last year.
- The collapse of mortgage provider Market Financial Solutions (MFS) in February is a primary driver of this increase.
- Overall UK company insolvencies saw a 6% rise in the first half of 2026.
- Increased costs and regulatory pressures are also contributing factors to business distress.
- The Financial Conduct Authority is investigating the collapse of MFS.
The number of financial services companies entering administration in the UK has significantly increased in the first half of 2026, with 49 firms collapsing. This represents a substantial rise from the 30 financial services companies that went under in the same period of 2025. The overall number of company insolvencies across all sectors also saw a 6% increase, reaching 649 in the first six months of 2026, up from 610 in the prior year.
According to a report by risk advisory firm Kroll, the surge in financial company insolvencies is linked to a combination of escalating costs, heightened regulatory pressures, and the significant fallout from the implosion of lender Market Financial Solutions (MFS) in February 2026. The collapse of MFS, a Mayfair-based lender, has had a cascading effect, impacting a network of banks and financial entities with connections to the firm and raising concerns about underwriting standards at larger financial institutions.
Sarah Rayment, managing director and global co-head of restructuring at Kroll, noted that while distress is visible across financial services, the issue is not necessarily systemic. Instead, many of the failed businesses are intermediaries or brokers that were directly affected by MFS's downfall. Consequently, financial compliance has become a critical focus for company boards. The Financial Conduct Authority is currently investigating the circumstances surrounding MFS's collapse.
Beyond the financial services sector, Kroll's report also indicated continued distress in manufacturing and construction. Manufacturing saw 80 firms enter administration, an 8.1% increase, while construction recorded 77 insolvencies, up 8.4%. The real estate sector experienced a slight decrease, with 59 firms going under, a 6.3% drop. These rising insolvencies occur against a backdrop of economic uncertainty, with businesses grappling with higher operational costs, increased tax burdens, and the anticipation of a new Prime Minister, Andy Burnham.