SMEs prepare for the long haul – The Turner Report

With the Turner Report's controversial proposal to raise the pension age beyond 65 still looming large ahead of an expected legislation overhaul in April, it seems that a significant number of SME owners and managers are already expecting to work well beyond this age.

The principal reason for the changes suggested by Turner is that people are living longer, which will inevitably put a strain on Government resources for state pensions. The report proposes that the rise in the state pension age should remain in proportion to this increasing longevity, ascending to about 66 in 2030 and around 67 by 2050.

However, research from specialist cash flow provider Bibby Financial Services suggests that one in five UK small-to-medium-sized business owners are already making provisions for a potentially late retirement. In fact, nearly half of respondents suggest that they are already resigned to the possibility of having to work well beyond 60.

Owners and managers are therefore turning their attention towards ways of building their own nest eggs in order to fund their retirement. In addition to the more traditional methods of investment such as paying into a private pension (68 per cent of those questioned), Bibby’s figures show that half of its respondents have invested in property in the UK, while a further 20 per cent have equity in property overseas.

The new A-day pension law reforms, due in April, will give small-to-medium-sized business owners further freedom, when a wider portfolio of investment in assets such as commercial property will also be recognised as a contribution towards one’s pension scheme.

David Robertson, CEO at Bibby, advises that, although many entrepreneurs devote a considerable part of their lives to their businesses, ‘owners and managers must learn that they have to let go of the reins eventually and enjoy a well-earned break.’ With 73 per cent of those surveyed stating an intention to spend more time with their families upon retirement and 67 per cent planning to fulfill their travel dreams overseas, it seems that this is exactly what they intend to do.

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