Downturn Hits South West Bosses’ Retirement Plans

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Clifton Asset Management research reveals that SMEs feel “abandoned” by Government and banks.

Falling pension and property values leave many owner-managers reliant on their business as a financial cushion.

Most South West small business owners are putting off their retirement due to the economic downturn, according to new research.

The majority also see retirement as being a decade or more away – with 22 per cent not intending to retire at all.

Bristol-based Clifton Asset Management, the UK’s leading alternative to banks for owner-managed businesses’ finance and strategic planning, questioned more than 100 business owners across the region about their retirement plans.

The study found that owner-managers feel increasingly pessimistic about the effect of the general economic situation on their exit plans.

They are also scathing about what they see as the Government’s failure to appreciate the crucial role of SMEs, and about the effect of its pensions policy on their financial position in retirement.

Neil Greenaway, managing director at Clifton Asset Management, said the research clearly indicated “troubling times” and that that SME owners in the South West felt “abandoned” by both Government and the banks

One owner-manager who took part commented: “No-one in Government has held down a proper job before so they have no idea about how small businesses operate, or about the pressure to sustain growth and momentum in normal times, let alone in harsh economic times.”

And in the view of another respondent: “The Government should stop focusing on multinationals and work with small businesses that generate work and wealth for local economies.”

The Clifton Asset Management research found that:

  • more than half – 52 per cent – of South West business owners feel they are further away from retirement now than they were a year ago
  • 64 per cent feel retirement is at least 10 years away, compared with 60 per cent nationally
  • the worst-affected sectors include building and construction, carpenters and plumbers, estate agents, architects and engineers; less severely affected are manufacturing, retail, hotels and leisure, transport and agriculture
  • just under half of business owners plan to retire between the age of 55 and 65, while 22 per cent do not plan to retire at all
  • more than a third (37 per cent) say they either will, or may, start another business when they exit their current one
  • only 2 per cent feel that Government recognises the crucial role of owner-managed businesses to the economy, with the same amount believing that Gordon Brown has been good for their pension plans.

Meanwhile when it came to the importance of a number various factors on their retirement plans, the general economic climate was cited by most (52 per cent) as the principal influence. The ability to find a buyer for their business was viewed by respondents as the least significant factor, being seen as crucial by 33 per cent.

“After having been let down by traditional pensions over the last 20 years, many business owners chose to invest in buy-to-let properties to build assets for their retirement,” he said.

“Now, as that market deteriorates, these same owners must look to the value in their businesses to provide a financial cushion, while staring a possible recession in the face.

“We all dream of putting our feet up and feeling the sand between our toes – but the reality is that many of the UK’s business owners feel further away from realising those dreams today than they were last year.”

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