06/11/2009 15:00

PricewaterhouseCoopers LLP (PwC) analysis of today’s national corporate insolvency statistics found that the number of corporate insolvencies in quarter three of 2009 has shown a decrease of 7.2% in overall numbers since the last quarter, however the numbers are still an 11 % increase on the same quarter of last year and remain at a ten-year high.

Commenting on the impact on pensions, Jonathon Land, partner and pensions credit advisory leader, PricewaterhouseCoopers LLP, said:

"While we're finally seeing a tail off to the huge numbers of insolvencies this recession has brought, they still remain at unprecedented levels. There is often a spike in the number of companies failing as economies recover because some businesses take their eye off cash control - pension scheme trustees must continue to monitor the strength of their employer and actively pursue ways to optimise their schemes' positions.

"The utilities sector may be an area to come under pressure. Some companies in this industry have historically pushed for long recovery periods - shorter recovery periods, higher leverage within the industry and push back on passing costs onto consumers may result in greater competition for cash in the longer term.

“Where the principal employer is private equity backed, scheme trustees should be aware that private equity activity is starting to pick up and some houses will soon be looking to start off-loading their investments and be ready to negotiate should the need arise."

In total, 6,114 businesses across England and Wales entered into insolvency in July, August and September of this year. Within these numbers, there has been an increase in receiverships which are particularly relevant in distressed real estate situations. Comparing the first three quarters of 2009 against the first three quarters of 2008, we are seeing an increase of 32% in total numbers suggesting 2009 is looking to be a watershed year for insolvencies.

ENDS

The statistics are available here: http://www.insolvency.gov.uk/otherinformation/statistics/insolv.htm The figures referred to above are the combined corporate insolvency numbers.

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