Commenting on the latest UK company insolvency statistics, Nick Agius, Director at Cardano Advisory, said: “This month’s insolvency statistics are a stark reminder that corporates are continuing to struggle to meet spiralling costs, with the number of UK company insolvencies rising by 19% over the last year, and up 17% since last month.”

“There are of course many factors which go into determining these numbers, but it cannot be denied that pressure on corporate cash flows remains firm. Despite early signs that the economy is stabilising, thanks in part to interest rates remaining flat and inflation continuing its downward trickle, it seems the impact of heightened uncertainty over recent months is finally catching up with UK businesses, as the number of administrations and liquidations* rise 28% and 17% respectively since October last year.”

“UK corporates will be crying out for some certainty as they struggle to balance the books, finding wiggle room where they can when it comes to cash flow and debt obligations. Currently we don’t envisage interest rates to start to come down until late 2024. Unfortunately this is too little too late for some corporates as the number entering into company voluntary arrangements skyrocketed by nearly 400% compared to October last year. This trend undoubtedly calls into question the ability of these companies to support any DB pension liabilities sitting on their balance sheets.

“Sponsoring companies under strain should ensure their pension trustees are abreast of the scheme’s financial situation so that they are able to act in the best interests of the members they represent.”

*Compulsory liquidations and creditors’ voluntary liquidations

• Corporates
• DB schemes
• Defined Benefit (DB)