A total of 219 pubs entered insolvency in Q2, followed by 189 in Q3 - up from 163 in the first quarter.
‘Highest monthly figure in 10 years’
The data shows a sharp rise following April’s tax and wage increases, and June saw 84 pub insolvencies, the highest monthly figure in more than a decade.
The spike coincided with the rise in employer national insurance contributions from 13.8% to 15%, the increase in the national living wage to £12.21, and inflation rising to 3.5% in April.
‘Severe, immediate pressure’
Price Bailey said the convergence of these costs had placed “severe and immediate pressure” on hospitality operators.
Price Bailey also reviewed the credit risk scores of all 37,045 pubs and bars in the UK. It found that 4,742 pubs are both technically insolvent (with negative net assets) and rated maximum risk on the Delphi credit scale - up 14% year-on-year.
Head of the firm’s insolvency and recovery Team, Matt Howard, said: “The April tax and wage hikes were expected to have a delayed impact, but the data shows a sharp and immediate effect. Many pubs had already exhausted their financial buffers and simply couldn’t absorb the additional costs.”
“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.”
‘Reshaped for necessity’
“Even when turnover improves, wage costs mean many pubs remain in the red for large parts of the trading week. The sector is being reshaped by necessity - many are cutting kitchen hours and restricting opening times to the most profitable slots.”
He warned that one in eight pubs are now both technically insolvent and rated maximum risk, meaning “many are likely to face winding-up petitions or dissolution notices within the next 12 months.”
Price Bailey added that even innovative entrants to the market are not immune.
“While theme pubs and experiential venues continue to expand selectively, we’re also seeing site closures and operational pauses,” Howard added. “Traditional models are under strain, and even new formats must navigate rising costs, shifting consumer habits, and local viability. The challenge now is not just survival, but adaptation.”
The firm said the pattern of insolvencies reflects a wider slowdown across the hospitality sector, with rising tax and regulatory costs continuing to squeeze operators despite record consumer spend in other leisure categories.
