Financial crisis delays Retirement
Small–business owners are being forced to shelve their retirement plans because of the deepening economic crisis, according to financial services firm Clifton Asset Management (CAM).
CAM’s survey of more than 1,000 small–business owners revealed that 42% blamed the credit crisis for dealing a ‘major blow’ to their retirement prospects. The research also found that 40% said that their pensions and savings were their main concern, with an equal number saying that the bleak economic outlook had severely affected the likelihood of finding an interested buyer. CAM director Anthony Carty said:
“The ongoing stock market turmoil and the bail–out of the banks will do nothing to calm people’s fears when they weigh up their retirement options in the coming months,”.
The survey also found that 65% of small–business owners felt that their retirement was now further away than it was a year ago — compared with 56% who felt this way just three months ago.
The Association of Chartered Certified Accountants’ (ACCA) SME policy adviser, Manos Schizas, agreed that business owners weighing up their retirement options were in a tough position.
“When you consider that pensions, on average, have lost a third of their value in the past year, the kind of money that the average business person has been relying on in retirement has been badly dented,”.
“Apart from not panic selling, and making sure they have reasonable and well diversified investments, people can’t actually do an enormous amount to bolster their retirement funds,” added Schizas.
“But if you’re looking to sell the business, there are a number of things you can to strengthen your position, such as demonstrating the quality of the venture,”
“If you can make sure the business is robust, from a healthy cashflow to a good balance sheet and effective internal controls to prevent late payments, you’re clearly putting yourself in as strong a position as possible. The message is to try and think long–term if possible.”
The CAM survey found that the retirement plans of small–business owners in construction, consultancy, transport and wholesale businesses have been the hardest hit, followed by those in manufacturing and retail.