# What happens to my unpaid wages if my company goes into administration?

- Jurisdiction: United Kingdom
- Practice area: Small Claims Law
- Published: 2026-10-30
- Last updated: 2026-10-30
- Canonical: https://lawasked.com/uk/small-claims/happens-my-unpaid-wages-if-my-company-goes

## Question

I have been working as a junior administrator for a small marketing firm based in Manchester, England, for about eighteen months. My monthly pay cheque is usually paid on the last Friday of every month, but this month has been different. On the 28th of last month, our office manager told us that the company is facing severe financial difficulties and that a liquidator might be appointed soon. Since then, we haven't received any updates, and my salary for the last four weeks, which totals £1,850, is now overdue. I have already tried emailing the director and calling the office several times, but I just get an automated message saying they are currently undergoing a formal insolvency process. I am really worried about how I am going to pay my rent next week. I need to know if the company is officially considered 'insolvent' in a way that allows me to claim my missing wages and holiday pay from the government, or if I just have to wait in line with all the other creditors while the company is wound up.

## Summary

It depends on whether your company has officially entered a formal insolvency process. If the company is officially in administration, you may be able to claim your £1,850 in unpaid wages and holiday pay from the government's National Insurance Fund.

## Analysis

Whether you can claim your £1,850 from the government depends on whether your marketing firm has met the legal definition of being 'insolvent'. Under the law, a company is considered insolvent if it is "in administration for the purposes of the Insolvency Act 1986" [1]. Administration is a formal legal process where an insolvency practitioner takes control of a company to try and save it or settle its debts. 

If the company is officially in this state, you may be able to recover your money. The law states that if an employee makes a written application and the Secretary of State is satisfied that "the employee’s employer has become insolvent, ... the employee’s employment has been terminated, and on the appropriate date the employee was entitled to be paid" [2], the government shall "pay the employee out of the National Insurance Fund the amount to which, in the opinion of the Secretary of State, the employee is entitled" [2]. This means the government acts as a safety net to pay your missing salary and holiday pay when the company cannot.

Currently, your situation is uncertain because you have only received an automated message. While your office manager mentioned a liquidator might be appointed, the law requires a specific legal trigger to occur. For a company, this includes things like a winding up order being made or an administration order being issued [1]. Until a formal insolvency practitioner is officially appointed or a court order is made, the company might not yet be legally 'insolvent' for the purposes of these specific claims. You cannot claim from the National Insurance Fund until these formal legal steps are confirmed. 

Note that state, provincial or local law may add further rules, so you should check specific UK government guidance for insolvency practitioners.

## Statutory citations

- Employment Rights Act 1996, Section 183 - Insolvency. [in force] (https://www.legislation.gov.uk/ukpga/1996/18/section/183)
  > where the employer is a company... if... the company is in administration for the purposes of the Insolvency Act 1986
- Employment Rights Act 1996, Section 182 - Employee’s rights on insolvency of employer. [in force] (https://www.legislation.gov.uk/ukpga/1996/18/section/182)
  > the Secretary of State shall... pay the employee out of the National Insurance Fund the amount to which, in the opinion of the Secretary of State, the employee is entitled in respect of the debt.

---
General information only, not legal advice. See https://lawasked.com/disclaimer