Financial services bankruptcies rise as MFS collapse ripples through sector
The number of financial services companies entering administration spiked sharply in the first half of 2026 on the back of rising costs and the ripple effects of the collapse of mortgage provider Market Financial Solutions, according to a risk advisory firm.
A total of 649 companies across sectors went under across the UK between January and June 2026, a 6 per cent increase on the 610 recorded in the first half 2025. Of those, 49 were financial services companies, up from 30 last year, the report from Kroll found.
The rise in financial company insolvencies reflected both increased cost and regulatory pressures as well as the implosion of lender MFS in February, Kroll said. The collapse hit a web of banks and financial companies with ties to the Mayfair-based lender and triggered panic in markets over slack underwriting processes at some of the world’s biggest financial institutions.
“This year it’s across financial services where we are seeing more distress,” Sarah Rayment, managing director and global co-head of restructuring, told City PM. “However look closely, it’s not necessarily a systematic issue with the industry, but many of these businesses are intermediaries or brokers have failed as a consequence of the collapse of MFS. As a result, financial compliance is becoming a key topic of conversation among boards.”
MFS’s collapse is being probed by the Financial Conduct Authority.
In Kroll’s report, manufacturing and construction continue to dominate the insolvency statistics. Some 80 firms called in adminstrators in the first half, up 8.1 per cent, while construction recorded 77, an increase of 8.4 per cent. Real estate followed with 59, down 6.3 per cent.
The rise in insolvencies comes against a backdrop of economic uncertainty as businesses navigate higher costs and a swollen tax bill as well as the uncertainty associated with the incoming Prime Minister, Andy Burnham. Separate data from the British Chambers of Commerce found that companies had stalled hiring plans ahead of the next Prime Minister taking office.