RETIREMENT MOVING FURTHER AWAY FOR TRANSPORT BOSSES
Economic downturn hits retirement prospects in the sector, according to Clifton Asset Management survey
Retirement is becoming a distant dream for the owners of many transport businesses as the prospect of recession looms.
Transport companies, having already struggled to cope with soaring fuel prices earlier in the year, now say the worsening economic climate is having an impact on their retirement plans.
These are among the findings of a nationwide survey carried out by Clifton Asset Management (CAM), the UK's leading alternative to banks for owner-managed businesses' finance and strategic planning.
CAM questioned more than 1,000 business owners, across all sectors, about their retirement plans.
And while those who say they are feeling downbeat about their immediate prospects are still in a minority, a quarter admit they will be forced to cut jobs in the next six months.
They are also increasingly critical 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.
Anthony Carty, director at CAM, said that 65 per cent of the business owners questioned felt that their retirement was now further away than it was a year ago, with transport, construction, retail and manufacturing among the worst affected.
“This compares with a figure of 56 per cent in our last survey just three months ago, so clearly the economic downturn is already having an impact on people's retirement plans,” he commented.
“Hauliers and the like have already had to endure several months of rising fuel prices. And although prices have now fallen as a result of the economic slowdown, the prospect of a full recession, ongoing stock market turmoil and the bail-out of the banks will do nothing to calm the fears of transport bosses when they come to weigh up their retirement options in the coming months. ”
The Clifton Asset Management research also found that while across all sectors, 71 per cent of owner-managers said they were generally optimistic about the prospects for their business and only 13 per cent were definitely pessimistic, almost a quarter (24 per cent) said they would have to reduce their payroll in the next six months.
Other key findings in the survey include:
• just under half of business owners plan to retire between the age of 55 and 65, while 20 per cent do not plan to retire at all
• just 8 per cent feel that Government recognises the crucial role of owner-managed businesses to the economy, with the same figure believing that Gordon Brown has been “good” for their pension plans
• some 37 per cent of business owners have bought their current business premises with their pension provision in mind
Anthony Carty added that the survey showed many SME owners were still enjoying the effects of having run a business in more benevolent times.
He concluded: “It appears that businesses are yet to feel the full shock of what is happening out there, and perhaps there is an element of still being able to benefit from the kinder trading conditions of last year.
“This comfort zone will disappear as we move into 2009 and it is striking that a quarter of businesses are already planning job cuts.
“We are in for a very tough six-nine months, and this is backed up by the feedback we are receiving from businesses across the country every single day. In the light of all this it is hardly surprising that business owners feel their retirement is moving further away.”