smallbusiness.co.uk: Helping your business think big

Email a Friend

Half of business owners have no pension plan

Almost half (46 per cent) of UK business owners – or 1.3 million people – have no private pension savings to support them in retirement, research finds.

Almost half (46 per cent) of UK business owners – or 1.3 million people – have no private pension savings to support them in retirement, research finds.

Of those who have failed to make any private pension provision, more than half (54 per cent) say this is because they simply could not afford to set money aside, according to research from Prudential.

Nearly one in five (18 per cent) say they don’t have a pension because they will never retire, and 9 per cent claim they have sufficient funds in a company pension from previous employment.  

Nearly one third (29 per cent) of business owners, or 792,000 people, say they will be entirely reliant on the state pension when they come to retire, compared with just 16 per cent of people across all employment types retiring this year in the UK.  

Other self-employed workers will supplement their retirement incomes with money from a mix of alternative sources: 48 per cent will draw on other savings and investments, 25 per cent will use equity from their properties, 25 per cent plan to use their partners’ pensions, and 19 per cent plan to use funds from the eventual sale of their businesses.  

Of those business owners who don’t have a pension, the majority of respondents (63 per cent) don't plan to start one in the future.  

Only 13 per cent say they are planning to start a pension and just under a quarter (24 per cent) are undecided.  

Stan Russell, retirement expert at Prudential says that it is sometimes hard for self-employed workers to distinguish between their business and personal finances.

'Often, investing in the business takes priority over saving for retirement – an issue that is particularly prevalent now, given the tough economic conditions facing UK businesses.

'Unfortunately, the long-term implications of not saving for retirement are that many retirees will have a real income shock and reduced living standards when they finally retire. And while a number of business owners say they don’t need a pension because they’ll never stop working, this optimistic approach won’t always be realistic – for example because of health issues later in life.'  

See also: Small business owners have no regrets

Previous article

PAYE shake-up will create 'enormous burden for small businesses'

Next article

Late payment continues to threaten businesses

Post a comment

Related

Guide | Ideas & business planning

How to write your business plan

News | Outlook

Is your business plan a winner?

News | Outlook

Helping hand for stressed business owners
Checklist: what should be in your business plan

Guide | Ideas & business planning

Checklist: what should be in your business plan

Small Business Offers

  • Compare business insurance quotes

    Tailor your policy, compare quotes and buy in minutes! Up to 50% No Claims Discount. Compare quotes or call 0845-0723340 today.

  • Need Business Credit?

    Take control of your business credit score with My Business Profile. See what the lenders see about your business, sign up today and Get the First Month FREE*.

  • Helping businesses look forward with confidence

    We offer business management software and services to millions of businesses like yours. Our local experts can help you become more efficient, gain valuable insights and feel in control.

  • Never Miss a Sale

    As the UK’s leading payment processor, Worldpay can help you set-up and manage card transactions easily, whether you want to accept online, face-to-face or mail and telephone orders. Register today to speak with a Worldpay expert.

  • Compare Business Phones

    An instant business mobile phone comparison website which compares the entire market, all the networks and all devices on one site. Save money instantly.

  • Content Choices from SmallBusiness

    Receive regular guides, whitepapers and advice to help you start and run a successful business.

More from Small Business

Starting a Business
Addressing your marketing collateral for trade shows

Addressing your marketing collateral for trade shows

Here, we look at why it is necessary to make your exhibition stall stand out...  

Financing a Business
Get your books in order now and avoid another self-assessment nightmare

Get your books in order now and avoid another self-assessment nightmare

Emily Coltman gives her top tips for getting your books in order now, so you...  

Running a Business
The rise of the mobile worker: Making remote working work for your business

The rise of the mobile worker: Making remote working work for your business

Mobile working has been under scrutiny since last year's legislation made it easier for employees...  

Blog
Election 2015: The outlook for SMEs

Election 2015: The outlook for SMEs

Richard Healy discusses what entrepreneurs really want to hear from the government in the coming...