Retirement just a dream for small business owners

PUBLISHED: 10:53 10 September 2009 | UPDATED: 00:09 16 June 2010

The South West s small business owners are among the most optimistic in the country despite retirement remaining a distant dream for the vast majority, according to research.

The South West's small business owners are among the most optimistic in the country despite retirement remaining a distant dream for the vast majority, according to research.

They are also the UK's most clued-up group of company owners when it comes to knowledge of the Government's attempts to stimulate bank lending to businesses through the Enterprise Finance Guarantee.

The latest quarterly survey of business owners in the South West, carried out by Clifton Asset Management (CAM), also reveals that close to a third have been forced to shed jobs in the last six months.

The survey from CAM, which provides specialist financial and strategic advice to SMEs, shows that 81 per cent of business owners feel their retirement is further away now than it was a year ago. This has not moved since the last survey three months ago and stood at just 52 per cent 12 months ago.

"Despite recent speculation about 'green shoots', we are still deep in the worst recession in living memory and it is no surprise to see this fact reflected in the way the South West's small business owners see their future prospects," said Neil Greenaway, managing director of Clifton Asset Management.

Almost a third - 32 per cent - of South West companies in the survey said they had been forced to shed jobs over the past six months, with 12 per cent saying they may be forced to reduce their payroll even further.

However almost half (46 per cent) believe the South West is better placed than any other UK region to withstand the recession, the highest UK figure outside the South East of England.

"These figures give some cause for optimism that the worst may be over but they should be treated with caution," said Mr Greenaway. "For example, only 21 per cent small businesses in the South West who took part in our survey are now operating a company pension scheme, and of those, just 40 per cent are continuing to make regular contributions.

"This speaks volumes about our current financial plight and the degree of apprehension most business owners have about the future."

Meanwhile according to the CAM research, there is still very little enthusiasm for the Government's flagship scheme to support small businesses through the downturn, the Enterprise Finance Guarantee.

While the number of South West business owners who are aware of the EFG has risen to 73 per cent - the highest figure in the country - a massive 95 per cent see no benefit in making an application under the scheme.

Neil Greenaway commented: "We learned recently from the Government's own figures, that the amount of money in the form of loan guarantees which got through to businesses over the financial year just gone, had actually fallen on the previous year and was well short of the £1.3 billion budget which had been set.

"Once again our survey backs up the huge store of anecdotal evidence we have received from business owners who again and again report that it remains near- impossible for them to access finance from the banks.

"Likewise, only 21 per cent of those South West businesses questioned in our survey say that that the Government fully appreciates the crucial role of owner- managed businesses in the UK economy."

He added: "Since we launched our survey there has been a steady increase in the number of business owners who are telling us that their retirement has moved further away.

"While it is encouraging that a fifth of South West companies believe the worst of the recession may be over, our research continues to highlight the desperate situation for many in regard to pension schemes, and a complete lack of confidence in the Government's attempts to support their sector.

"Both of these factors need to be properly addressed before the region's SMEs can feel fully confident about the future.


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