A rise in the number of late payments made into company schemes could be indicative of "economic problems laying ahead", said Pinsent Masons lawyers.

According to research by the law firm there was a 35% rise in late payments last year, which increased from 6787 in 2011 to 9172 in 2012.

The number of late payment notifications has reached its highest point in the past five years, which even includes the number of delays to pension payments at the height of the financial crisis.

Specialist restructuring lawyers at Pinsent Masons said that the rise could be a sign of "an impending wave of restructuring and insolvencies".

Jamie White, Pinsent Masons partner and head of restructuring, said: "Time and again we have seen in insolvency proceedings that when companies are in distress pension payments are deferred or not paid at all in an attempt to free up cash. This can buy time but creates - or adds to - a deficit while the business tries to trade its way out of trouble.

"The latest increase does raise real concerns. A proportion of this increase can be put down to the increased profile and vigilance of the regulator and improved compliance by industry - and particularly the insurance companies administering the schemes.

"However, those factors alone do not sufficiently explain the trend. The Pensions Regulator stipulates that it should only be notified of late payments if they are of 'material significance'."

White added that even though a 'lifeboat' fund exists through the Pension Protection Fund (PPF) to support pensioners when schemes have failed, if there are large-scale insolvencies, then "there will be questions around the level of support available".

First published 15.04.2013

monique_simpson@wilmington.co.uk