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One-in-eight pubs now at imminent risk of insolvency

This is up from 1 in 10 pubs at risk of insolvency just over a year ago (as Harpers reported).

To obtain this figure, Price Bailey analysed the balance sheets and credit risk scores of all 38,126 pubs and bars in the UK, and found that 23% of the total (8,605 pubs) now have negative net assets.

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Of these pubs, 56% (4,800 pubs) are rated in the highest category for credit risk, increasing from 4,244 a year earlier.

This means 13% of all pubs (around one-in-eight) now meet both criteria, up from 11% (approximately one-in-10) last year.

Price Bailey explained that when a pub’s liabilities exceed their balance-sheet assets, it is technically insolvent.

Additionally, the Maximum Delphi Risk score is the highest category of credit risk used to assess the likelihood of default.

When both of these conditions are present, businesses are at much higher risk of becoming cash-flow insolvent, often struggle to secure new borrowing and are highly exposed to creditor action – winding-up petitions (a legal petition for compulsory liquidation), for example.

Matt Howard, head of the insolvency and recovery team at Price Bailey, commented: “These figures reflect a sector caught between rising fixed costs and fragile consumer demand, as stubbornly high inflation and tax pressures continue to erode disposable incomes.

“The government’s decision to soften the impact of the 2026 ratings list will come as a relief to many publicans, but the underlying picture remains unchanged. Business rates were only one part of the pressure.

“Wage costs, tax rises, energy bills and inflation have been eroding margins for years. The rise from one-in-10 pubs to one-in-eight meeting both technical insolvency and maximum credit risk criteria shows that the structural challenges run far deeper than the ratings system alone.”

The firm added that while there is growth for some branded and “experiential” venues, the overall pace of new openings has slowed over the past year, and closures have risen across both independents and chain operators.

Howard concluded: “Even as energy prices stabilise, wage costs and business rates remain structurally higher than pre pandemic levels. For many pubs, this means that even periods of strong turnover are insufficient to restore profitability.”

“December is usually the month that keeps pubs afloat. When the festive season fails to deliver a strong cash buffer, January and February become far more dangerous.”

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• tax
• pubs
• wage costs
• energy costs
• insolvency
• Pub Closures
• Price Bailey
• Maximum Delphi Risk